Colombo, Sri Lanka – 15 September 2026 – Sri Lanka’s economy demonstrated sustained positive momentum in August 2026, with both the Manufacturing and Services sectors registering expansions, according to the latest Purchasing Managers’ Index (PMI) released by the Central Bank of Sri Lanka (CBSL) today. The report indicates a healthy, albeit varied, growth trajectory across key economic activities.
Manufacturing Sector: Expansion Continues at a Slower Pace
The Sri Lanka Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded an index value of 53.0 in August 2026. While this figure signifies an ongoing expansion in manufacturing activities, it represents a moderation compared to the previous month’s stronger performance.
A closer look at the sub-indices reveals nuanced trends:
- New Orders remained at the neutral threshold (50.0), suggesting broadly unchanged levels of new business during the month.
- Production experienced a moderation, falling to 48.4, driven primarily by a slowdown in the manufacture of textiles and wearing apparel sector.
- Both Employment (54.8) and Quantity of Purchases (54.8) sub-indices showed positive growth at a higher rate. This reflects continued hiring and a strategic build-up of inventories, likely in anticipation of year-end seasonal demand.
- Conversely, Suppliers’ Delivery Times lengthened further to 63.0, indicating persistent supply chain disruptions that continue to challenge manufacturers.
Despite some near-term challenges, particularly concerning supply chains, the outlook for the manufacturing sector remains positive, largely buoyed by the expected year-end seasonal upturn in production.
Services Sector: Accelerated Growth Fuels Optimism
The Services sector exhibited a robust performance, with the PMI – Services recording an index value of 65.6 in August 2026. This indicates an accelerated expansion in services activities compared to July, marking a significant boost to the overall economy.
The strong growth in business activity was broadly supported across multiple sub-sectors:
- The primary drivers of this acceleration included robust performances in the transportation, wholesale and retail trade, and professional services sub-sectors.
- Financial and other personal services also contributed significantly to the upward trend.
- New Businesses saw an increase, largely attributed to expansions in wholesale and retail trade, financial, other personal, and professional services.
- Employment in the services sector rose, supported by new recruitments.
- Backlogs of Work declined in August, reversing the increase observed in the previous month, suggesting improved operational efficiency.
Expectations for business activity in the upcoming quarter remain highly positive, underpinned by anticipated broader economic improvements and a projected increase in tourist arrivals. However, global economic uncertainties continue to pose potential downside risks to this optimistic outlook.
Global Context and Understanding the PMI
Sri Lanka’s economic performance in August aligns with a broader global trend of rising economic activity. Major economies such as India, China, and the US also reported rising PMIs for August, albeit with varying rates of growth.
Understanding the PMI: The Purchasing Managers’ Index is a diffusion index, calculated between 0 and 100. An index value of 50 signifies neutrality on a month-on-month basis. A PMI above 50 indicates that the sector is generally expanding, while a PMI below 50 suggests a contraction.
The latest CBSL PMI report for August 2026 underscores Sri Lanka’s continued economic resilience and growth trajectory across its vital manufacturing and services sectors, paving the way for further stability and development.
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