Manufacturing expands in December | Sunday Observer

Manufacturing expands in December

24 January, 2021

Benefitting from the gradual normalising of economic activities in the country, the Manufacturing PMI continued to increase in December 2020, on a month-on-month basis, recording an index value of 61.2.

This was mainly attributable to the increases observed in Production, New Orders, Employment, and Stock of Purchases sub-indices. The significant increase in Production and New Orders sub indices, particularly in the manufacturing of food and beverages sector, has mainly contributed to the improvement in the overall index.

The Employment sub index also increased during December 2020. Some respondents in the manufacture of food and beverages and textiles and wearing apparel sectors highlighted that they could better use employees amidst the improved factory operations with increased demand.

The Stock of Purchases sub-index increased significantly in line with the expansion in New Orders and Production, as well as with the intended accumulation of stocks anticipating supply chain disruptions in coming months, particularly due to upcoming Chinese new year holidays. The Suppliers’ Delivery Time sub-index lengthened at a slower pace in December. Many respondents mentioned that their shipments were rescheduled, causing considerable delays in arrival/clearance of required materials, mainly due to the continuous delays at the Port of Colombo.

Expectations for manufacturing activities in the next three months improved further with the expectation for the normalisation of economic activities within the country as well as in major export markets.