Sri Lanka’s Construction Sector Gains Momentum as Projects Restart

Sri Lanka’s construction sector is showing strong signs of revival, driven by the resumption of stalled projects and a surge in new activity, according to the latest data.

The sector’s Purchasing Managers’ Index (PMI) for August registered an index value of 61.1, a slight increase from 60.0 in July, indicating expansion at a faster pace. This is the highest PMI recorded for the sector in over a year.

Key Drivers of Growth:

• Stalled and New Projects: The primary factor underpinning the expansion is the return of both previously suspended and newly commissioned projects.
• Private Sector Activity: Private building work is bustling, fueled by rock-bottom interest rates and a softening in the prices of construction materials, as indicated by the Colombo Consumer Price Index for September.
• Public Investment: Although public spending on projects remains below the budget allocation of Rs. 1.3 trillion for 2025, government activities in public goods have been ramping up.
• Infrastructure Focus: New construction work is notably common in road development and water supply projects.

The heightened activity has also led to a rise in employment, as the sector begins hiring to staff increasing project work. This continuous expansion in construction is seen as a positive sign that the overall economy, which grew by 4.8% in the first half of the year, is gathering speed.

Source: https://www.dailymirror.lk/print/business-news/Construction-sector-expands-at-faster-pace/273-321009