Labor Market Trends

Mere numbers may not be the easiest way to gauge the health of Sri Lanka's labor market. However, recent data released by the Central Bank of Sri Lanka show changes in labor force participation, falling below 50 percent of the total employable population.

- Jennifer Paldano Goonewardane.

In an estimated eight million employed persons in Sri Lanka, according to data, labor force participation (employable population includes those aged 15 and above) in the first quarter of 2023 was 49.9 percent. The unemployment rate in the first quarter of 2023 was 4.7 percent. In the second quarter of 2023, labor force participation was 48.6 while unemployment stood at 5.2. Between the first two quarters of 2023, there has been a 2.6 percent reduction in the country's labor force participation. In the first quarter of 2023, employment by economic activity stood at 26.7 percent for agriculture, 25.5 percent for industry, and 47.8 percent for services.

This data for the second quarter of 2023 stood at 25.7 percent for agriculture, 26.3 percent for industry, and 48.1 for services, recording a one percent decline in agriculture sector jobs but a marginal 0.8 percent increase in manufacturing sector employment and a 0.3 percent increase in services sector jobs. Declining jobs in the manufacturing sector, evident in 2022, show an increasing trend in the first two quarters of 2023. However, jobs in the agriculture sector, which had picked up towards the latter part of 2022, show declines in the first and second quarters of 2023. Jobs in the services sector have also picked up in the second quarter of 2023.

In the first quarter of 2022, the labor force participation rate was 51.2 percent, while unemployment was 4.3 percent. Employment in agriculture in the first quarter of 2022 was 25.0 percent, while employment in industry was 27.9 percent, and 47.1 percent was in services.