COLOMBO (News 1st): The Central Bank of Sri Lanka states that the manufacturing sector in the country improved in May 2019, compared to April this year. It adds that employment had contracted in May, as a slight decline in new recruitments were observed.
The Purchasing Managers’ Index or better known as the PMI, is an indicator of the economic health of the manufacturing sector in a country. The PMI is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
In April this year, manufacturing activities had contracted, recording an all-time low PMI index value of 41. However, according to the Central Bank, the performance of the manufacturing sector had improved by May 2019. The PMI index had increased to 50.7, mainly due to the significant increase in production. Employment had contracted in May, as a slight decline in new recruitments was observed.
Meanwhile, the services sector continued to deteriorate in May this year compared to previous months due to the decline in employment and business activities.
Employment has also declined, mainly due to discontinuation of the service of contract employees with the deterioration in business activity, particularly in tourism, accommodation, food & beverage, and other personal services.
Meanwhile, as per experts in the local tourism industry, foreign governments’ reactions to the terror attacks in the form of travel advisories, have directly impacted the livelihoods of thousands of families. The exodus of tourists after the 04/21 attacks caused hotel occupancy to plummet by 95% overnight while forward bookings, going as far as April 2020, have been cancelled.
Many Sri Lankan hotel staff are now working shifts and accepting lower pay. Those recently employed and still on probation have been dismissed. Small businesses have been compelled to shut down, and thousands of locals indirectly linked with the tourism industry are struggling to make ends meet.