According to the provisional estimates of the Department of Census and Statistics (DCS), the Sri Lankan economy is estimated to have grown by 4.1 per cent during the third quarter of 2016 compared to the growth of 5.6 per cent in the corresponding period of the previous year. Services activities grew by 4.7 per cent, while Industry activities grew notably by 6.8 per cent during the third quarter of 2016. However, Agriculture related activities continued to report a contraction, for the second consecutive quarter, by 1.9 per cent, impacted by the adverse weather conditions that prevailed during the third quarter of 2016. Favourable developments in leading economic indicators as well as the lower base in the fourth quarter of 2015 are likely to steer economic growth upwards in the final quarter of 2016 in spite of the effect of adverse weather conditions and global economic uncertainties.

The Manufacturing Sector PMI was 58.4 in November with an increase of 1.9 index points compared to October 2016 indicating that the manufacturing activities expanded in November compared to October. This was mainly due to the higher pace in which Employment and Production sub-indices expanded during the month. The New Orders sub-index also increased during the month. The Stock of Purchases sub-index decelerated in November indicating a usage of stocks for the upcoming season while Suppliers’ Delivery Time lengthened. Overall data points to an expansion where all the sub-indices are above the neutral 50.0 threshold. The expectations for activities indicated an improvement for the next three months.