Purchasing Managers’ Indices indicate a contraction in Manufacturing activities and Services activities in April 2026.
Following the seasonal pattern, Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) contracted in April 2026, recording an index value of 42.6. New Orders, Production, Employment, and Stock of Purchases sub-indices declined during the month compared to the seasonal peak in March, resulting in an overall contraction in the index.
According to respondents, the contraction in the New Orders sub-index was mainly attributed to fading festive demand, particularly in the manufacture of food and beverage and the manufacture of textiles & apparel sectors. The decline in the Production sub-index was largely due to fewer working days in April, as many manufacturing facilities remained closed during the Sinhala and Tamil New Year period. The Employment sub-index declined as manufacturers scaled back temporary workforces following the end of the seasonal labour requirements. The Stock of Purchases sub-index declined alongside the decreases in New Orders and Production. Meanwhile, Suppliers’ Delivery Time lengthened further, driven by festive-related disruptions and heightened logistical challenges stemming from the current conflict in the Middle East.
Expectations for manufacturing activities over the next three months indicate an improvement, though tempered by caution over risks associated with ongoing Middle East tensions.
Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) recorded an index value of 46.7 in April 2026, indicating a contraction in services activities, mainly due to seasonal impacts following the festive period and the increase in energy prices.
Business activities declined across most of the sectors during the month, primarily due to rising fuel prices, festive season holidays, and the slowdown in tourist arrivals. The transportation of goods and other personal service activities sub-sectors recorded the steepest contraction, while insurance, wholesale and retail trade, and accommodation, food and beverage service activities also reporting notable downturns.
New businesses declined in April 2026 for the first time since April 2023, particularly due to the deteriorations observed in transportation of goods, insurance, wholesale and retail trade, and accommodation, food and beverage service activities.
Employment declined in April 2026 due to contract expirations, retirements and resignations. Meanwhile, Backlogs of work continued to decline, although at a slower rate compared to the previous month.
Expectations for business activities over the next quarter remain positive, supported by the anticipated stabilisation in activities following the end of the war. However, the outlook is subject to several risks, including geopolitical tensions in the Middle East and broader global uncertainties.