Purchasing Managers’ Indices indicate expansions in both Manufacturing and Services activities in March 2026.
Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) increased to 66.7 in March 2026, supported by heightened activity related to seasonal demand. However, many respondents reported a tight production environment, mainly attributed to raw material and fuel shortages, rising costs, and logistical constraints.
The New Orders and Production sub-indices expanded in March, particularly within the food and beverages and textile and wearing apparel manufacturing sectors. The Stock of Purchases sub-index expanded in line with increasing production demand. Further, some firms reported precautionary stocking to safeguard their production pipelines against potential disruptions due to the ongoing Middle East conflict. The Employment Index expanded, albeit at a slower pace, in March. Meanwhile, the Suppliers' Delivery Time continued to lengthen, particularly due to demand pressures and shipping-related disruptions.
Expectations for manufacturing activities over the next quarter remained above the neutral threshold, though somewhat moderated by uncertainties related to the ongoing Middle East conflict.
Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) recorded an index value of 59.4 in March 2026, indicating an expansion in services activities compared to the previous month.
The expansion in business activities was supported by broad-based improvements across sectors. The financial services sector remained the primary driver, benefiting from increased lending activity. In addition, wholesale and retail trade showed an expansion due to the festive demand, while professional services and other personal service activities also recorded notable growth.
The expansion of new businesses continued in March 2026, driven by the financial service sector, with further support from significant growth in insurance and pension funding activities.
Employment increased further in March 2026, as firms expanded their workforce to meet rising consumer demand ahead of the festive season. Backlogs of work continued to decline, though the pace of contraction moderated during the month.
Expectations for Business Activity over the next quarter remained robust, supported by seasonal demand and new opportunities that could arise despite uncertainties in the current geopolitical environment. However, some firms highlighted downside risks to outlook, including the impact of the Middle East conflict and broader global economic uncertainty.