Sri Lanka’s construction sector expanded by 7.3% in 2024, following a 21.8% decline in 2023. This is due to a number of factors, including: Increased investment, improved external demand and Gross fixed capital formation.
The construction industry in Sri Lanka was poised to post a 10-14% growth in 2024 if the IMF program continues unhindered, CEO, Director General of the Chamber of Construction Industry of Sri Lanka (CCISL) opined at the BuildSL Exhibition launch held in Colombo
The government’s 2024 budget includes increased allocations for the Ministry of Transport and Highways, the Ministry of Education, and the Ministry of Health.: There is an increase in demand for the country’s construction industry.
Gross fixed capital formationis grew by 16% year-on-year in the first six months of 2024.The Purchasing Managers’ Index (PMI) for the construction industry in Sri Lanka also indicates a number of trends in the sector:
In October 2024 the PMI rebounded, with a Total Activity Index value of 54.3. This was due to the resolution of election-related uncertainties.
In November 2024 the PMI expanded, but at a slower pace, with a Total Activity Index value of 51.4. Some respondents noted that weather conditions disrupted their work.
Sri Lanka’s construction sector expanded at a slower rate in November registering an index value of 51.4, from 54.3 in October, hampered by severe weather conditions disrupting scheduled work, according to a Purchasing Managers Index compiled by the central bank.
“Several respondents mentioned that the severe weather conditions that prevailed during the month somewhat disrupted their scheduled work,” the statement said.
All the sub-indices, except for Suppliers’ Delivery Time, remained either on the neutral threshold or below in November.
Employment decreased on a month-on-month basis in November. “Firms remain cautious about expanding their workforce, as reflected by the continuous decline in the Employment index.”
New orders index declined, down at 47.2 in November from 54.3 in October, due to a delay in the tender evaluation process.
“Many survey respondents highlighted a slowdown in the tender evaluation process of construction projects towards the end of the year, leading to a decline in the New Orders index in November.”
Quantity of Purchases index remained neutral during the month, 50.0 in November from 51.4 in October, indicating that the material purchases stayed at a similar level as in the previous month.
Suppliers’ Delivery Time further lengthened during the month, registering 51.5 in November from 51.4 in October.
The outlook for construction activities for the next three months remains positive, according to the statement, as most firms are optimistic about the future availability of projects from January and favourable weather conditions.
