Manufacturing, service sectors hit all time lows amidst COVID-19 battle

COLOMBO (News1st): Sri Lanka's manufacturing and service sectors hit all-time lows in March due to COVID-19, the central bank said Thursday, forecasting negative growth in manufacturing for the next three months. The central bank, in a statement, noted that manufacturing had recorded an index value of 30.0 in the Purchasing Managers Index (PMI) last month, a reduction of 23.6 points from February. "The significant decline in production was due to the closure of manufacturing companies due to curfew since mid-March 2020," the central bank observed. New orders and purchasing of stocks too had declined following the closure of companies and the suspension of the production process. "The orders received at the beginning of March from USA and Europe markets, particularly textile and wearing apparel orders, were subsequently cancelled with the spread of the virus in those countries," the statement read. According to government statistics, textile and garment exports contributed 474 million US dollars to the country's economy in January. Meanwhile, the services sector has dwindled drastically to 32.0 on the PMI in March, the lowest since May 2015. "New businesses and business Activities declined mainly in services related to tourism industry such as hotels, travel agents, and recreation activities," the central bank further observed. It also attributed this situation to domestic travel restrictions, a slowdown in cargo handling, and failure to cater to market demands due to the issues with staff availability and delivery networks. Employment too had declined due to the discontinuation of contractual and casual employees and the freeze in recruitments.