Driven by a strong recovery in new orders, manufacturing activities recovered marginally during June 2021 from the adverse impacts of the third wave of the Covid-19 pandemic, according to the Central Bank of Sri Lanka.
“The new orders, especially in the manufacture of food and beverages, increased significantly. The production, employment, and stock of purchases sub-indices, mainly related to the food and beverages sector, edged up compared to the previous month yet remained below the neutral threshold level, owing to the disturbances from the third wave of the pandemic. However, the textile and wearing apparel sector indicated a deterioration in June, as reflected from the further decline in new orders, employment, and stock of purchases sub-indices,” Central Bank added.
The manufacturing purchasing managers’ index (PMI) recorded an index value of 50.4 in June 2021 with an increase of 8.3 index points from the previous month. All the other sub-indices, except suppliers’ delivery time, edged up from the previous month.
The suppliers’ delivery time continued to lengthen in June 2021, yet at a slower pace, with the ease of travel restrictions in the domestic front. However, many respondents to the survey mentioned that they experienced delays in making overseas payments and in opening letters of credit for import purposes, while those who were involved in exports of goods mentioned that they continuously experience difficulties in reserving shipping spaces on top of the short supply of empty containers.
Expectations for manufacturing activities for the next three months significantly increased with the anticipation that the economic activities would normalise in the coming months supported by the rapid rollout of the Covid-19 vaccination across the country, particularly in the Western Province, and the easing of mobility restrictions.