16.02.202610:41:58UTC+00Sri Lanka Services Growth Cools in January

Sri Lanka’s Services PMI eased to 64.5 in January 2026 from 67.9 in December, signaling a slower yet still robust expansion in the services sector. The moderation largely reflected a natural cooling in demand following the post-holiday peak. Nonetheless, activity remained strong in wholesale and retail trade, accommodation, food and beverage services, and financial services, underpinned by higher lending activity.

New business growth softened, with the corresponding index slipping to 60.8 from 64.6, led by more measured expansion in financial services, education, and transportation. Although still firmly in expansionary territory, the pace of growth was more cautious than in December.

Employment strengthened, with the index rising to 59.2 from 52.6, as firms continued to expand their workforce to accommodate prevailing demand. Meanwhile, backlogs of work declined to 48.9 from 53.8, indicating improved operational efficiency and a temporary easing of capacity pressures.

Business expectations for the coming quarter remained positive, supported by favorable macroeconomic conditions, seasonal demand patterns, and ongoing normalization following earlier weather-related disruptions.