Sri Lanka’s manufacturing and services sectors both contracted in April 2026 after a strong festive-led expansion in March, according to Purchasing Managers’ Index data released by the Central Bank on Monday.
The manufacturing PMI registered 42.6 in April, down sharply from 66.7 the previous month and well below the 50 threshold that separates expansion from contraction. The services PMI fell to 46.7 from 59.4 in March, recording its first contraction since April 2023.
“Sub-indices declined during the month compared to the seasonal peak in March, resulting in an overall contraction in the index,” the Central Bank said of the manufacturing reading.
The contraction in new manufacturing orders was attributed to fading festive demand, particularly in food and beverage and textiles and apparel. Production fell because many factories closed during the April holiday period, and the employment sub-index declined as manufacturers scaled back temporary workforces. Suppliers’ delivery times lengthened due to festive disruptions and heightened logistical challenges stemming from the conflict in West Asia.
The services contraction was broader-based. New business activity declined for the first time in three years, with the steepest falls recorded in transportation of goods and personal services. Insurance, wholesale and retail trade, and accommodation, food and beverage services also weakened.
“Business activities declined across most of the sectors during the month, primarily due to rising fuel prices, festive season holidays, and the slowdown in tourist arrivals,” CBSL said. Employment in services declined due to contract expirations, retirements and resignations, while backlogs of work continued to fall.
The dual-sector contraction reverses the March readings and arrives alongside the Rs.57 billion fuel subsidy and current account deficit re-emergence flagged by the Central Bank earlier this month.
