Sri Lanka Purchasing Managers’ Index for Manufacturing  (PMI – Manufacturing) reached 63.9 in March 2025, recording its highest value in four years. All sub-indices posted month-on-month expansions, reflecting a notable improvement in manufacturing activities, driven by the strong seasonal demand.

The sharp increases in the New Orders and Production sub-indices, particularly within the food and beverages and textile and wearing apparel manufacturing sectors, were the main contributors to the growth in the overall index. Moreover, both Employment and Stock of Purchases recorded expansions during the month, in line with the increases in New Orders and Production. Meanwhile, Suppliers' Delivery Time remained lengthened in March.

Expectations for manufacturing activity over the next three months are positive. However, many firms, especially export-oriented manufacturers, are concerned about the growing uncertainties in global trade.

Sri Lanka Purchasing Managers’ Index for Services (PMI – Services) recorded a value of 69.8 in March 2025 indicating a considerable expansion in services activities.

Business activities expanded significantly supported by the improvements observed across most of the sectors. Accordingly, business activities related to wholesale and retail trade showed a notable expansion driven by the festive demand. Further, business activities in the financial services also continued to improve attributable to increased lending activities. Additionally, professional services, other personal services, accommodation, food and beverage, and insurance related business activities also indicated improvements during the month.

New Businesses increased in March 2025, primarily due to the expansions observed in the financial services, wholesale and retail trade, other personal services, insurance, and accommodation, food and beverage related activities.

Employment continued to increase due to new recruitments made by many companies in view of the festive season. Meanwhile, Backlogs of Work continued to decline, yet at a slower rate, in March 2025.

Expectations for Business Activities for the next three months continued to improve, yet at a slower rate, amidst the uncertainties prevailed around import tariffs imposed by the US.