Sri Lanka’s construction sector returned to growth in May 2026, with the Purchasing Managers’ Index (PMI) rising to 59.1 from 45.7 in April. The recovery was driven by a steady increase in new project awards and the resumption of construction activities following the seasonal slowdown during the April festive period.
The sector’s New Orders Index increased to 63.6, indicating strong demand and a healthy pipeline of construction projects despite higher borrowing costs, rising material prices, and global economic uncertainties. Increased project activity also led to higher employment and a rebound in the purchase of construction materials, reflecting continued investment in infrastructure, tourism, industrial, and real estate developments.
Despite the positive outlook, the industry continues to face challenges, including shortages of skilled labour and rising costs of key construction materials such as bitumen. Nevertheless, construction firms remain optimistic, expecting activity to stay strong over the coming months, supported by ongoing project awards and the anticipated easing of geopolitical tensions affecting global markets.
