Colombo, Sri Lanka – August 17, 2026 – Sri Lanka’s economic momentum continued its upward trajectory in July 2026, with both the Manufacturing and Services sectors reporting robust expansion, according to the latest Purchasing Managers’ Index (PMI) survey released by the Central Bank of Sri Lanka (CBSL). The indices indicate a healthy month-on-month growth, signaling sustained recovery and business confidence.
Manufacturing Sector Sustains Growth Momentum
The Purchasing Managers’ Index for Manufacturing (PMI – Manufacturing) recorded a value of 55.0 in July 2026, reflecting a continued and accelerated expansion in manufacturing activities. This marks an improvement from June’s 53.0, underscoring the sector’s resilience and positive performance. All sub-indices contributed positively to this robust outcome.
The primary drivers behind the overall expansion were strong performances in the New Orders and Production sub-indices, largely propelled by the vibrant food and beverage manufacturing sector. Furthermore, both the Employment and Stock of Purchases sub-indices maintained expanded levels, reflecting positive expectations for future manufacturing activities. However, persistent supply-chain pressures were indicated by the Suppliers’ Delivery Time sub-index, which remained lengthened during the month.
Despite navigating global uncertainties, the manufacturing sector maintains an optimistic outlook for the upcoming three months, balancing caution with positive growth prospects.
Services Sector Shows Accelerated Expansion
Complementing the manufacturing sector’s performance, the Purchasing Managers’ Index for Services (PMI – Services) recorded an impressive 61.4 in July 2026. This figure signifies an accelerated expansion in services activities compared to the previous month’s 58.5, highlighting a robust rebound across various service industries.
The expansion in business activity during July was broad-based, with significant contributions from the transportation, financial, and professional services sub-sectors. The “other personal services” sub-sector also demonstrated notable growth. New businesses experienced a healthy expansion, predominantly led by transportation and professional services, with financial and other personal services also playing a key role.
Employment within the services sector saw an increase, supported by new recruitments and a deceleration in staff resignations. Backlogs of Work also increased month-on-month, indicating a growing pipeline of business. Expectations for business activity in the upcoming quarter strengthened further, fueled by anticipated economic improvements and a strong influx of tourist arrivals, particularly benefiting from the Kandy Esala Perahera. Nevertheless, broader global economic uncertainties continue to present potential downside risks to the overall outlook.
Economic Significance and Outlook
The July 2026 PMI figures, both well above the neutral 50-point mark, provide a strong indication of Sri Lanka’s sustained economic recovery and growth. A PMI value above 50 signifies general expansion, while a value below 50 indicates contraction. The current readings suggest that businesses across key sectors are experiencing increased demand, production, and employment, fostering a positive environment for investment and future growth.
These consistent expansions underscore the effectiveness of ongoing economic policies and the resilience of Sri Lankan businesses in adapting to evolving market conditions. While global economic headwinds persist, the domestic economy demonstrates a commendable capacity for internal growth drivers, particularly in vital sectors such as food and beverage, transportation, and financial services.
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