By: Staff Writer
November 06, Colombo (LNW): The Ceylon Institute of Builders (CIOB) has submitted its 2026/2027 Sri Lankan Construction Industry Budget Proposal to the Ministry of Construction, in a high-level ceremony attended by the Minister, Deputy Minister and the Secretary of the Ministry. The document lays out a sweeping roadmap to reinvigorate Sri Lanka’s construction industry positioning it as a linchpin of national economic growth once again.
According to the proposal, the industry has endured six consecutive years of stagnation and liquidity stress. CIOB argues urgent policy intervention and financial relief are necessary to reverse that trend. The roadmap sets out an ambitious target: restore the sector’s contribution to roughly 10 % of GDP, with a target industry turnover of LKR 2.97 trillion (about US$9.89 billion).
Key pillars of the plan include restarting stalled infrastructure projects (roads, hospitals, housing), rebuilding SME contractor capacity (noting a current 40 % SME failure rate), the creation of an Infrastructure Fund, concessional loan schemes (interest at or below 6 %), and encouraging exports and foreign investment via an international construction investor forum. The proposal also emphasises local material production, digitalisation of SMEs, and strong governance via formation of a National Steering Committee and an independent Programme Management Unit. CIOB President Dr. Rohan Karunaratne stated: “The construction sector is the engine that keeps Sri Lanka moving. This proposal offers a clear path to rebuild confidence, create jobs, and deliver long-term value to the economy.”
The timing of the submission aligns with signs of renewed strength in the construction sector. According to official data, the sector expanded by 8.5 % in the quarter ended June 2025, bringing first-half growth to 9.6 % year-on-year.
The sector’s purchasing-managers index (PMI) reached 67.6 in September 2025, the strongest reading since late 2021, highlighting increased new orders, employment and purchases in the industry.
CIOB’s plan seeks to harness that momentum to drive a broader recovery.However, the proposal underscores that without targeted relief and policy changes, the sector risks faltering again. SMEs, which form a key part of the contractor base, remain vulnerable.
The proposal warns that failure to implement change will blunt job creation (targeting over 1.5 million direct jobs and safeguarding 20,000 existing ones) and hamper the revival of stalled infrastructure.
The document estimates that if adopted, the plan could complete 60 % of currently stalled projects, revive approximately 3,000 SMEs and strengthen Sri Lanka’s export capacity in construction services.
The CIOB’s agenda asks the government to formally recognise the construction industry as a “priority crisis-hit sector,” so that emergency financial support and implementation of Cabinet-approved relief can take place.
With public allocation in the 2025 budget reaching LKR 1.3 trillion for public investment, the industry sees an opportunity but also warns the gap between allocated funds and project execution remains a major challenge.
As Sri Lanka seeks to rebuild after recent economic headwinds and position infrastructure development at the heart of recovery, the CIOB’s proposal offers a structured blueprint. Yet the crucial question remains: will policy makers act swiftly and decisively enough for the construction sector’s recovery to deliver broad-based economic benefits?
