By: Staff Writer
March 01, Colombo (LNW): Sri Lanka’s construction sector further expanded to 52.9 in January 2025, from 51.4 in December 2024, according to a Purchasing Managers Index compiled by the central bank.
“Most survey respondents mentioned that prevailing business conditions, particularly stable price levels and favourable weather, had expedited the completion of ongoing construction projects,” the statement said.
“It was further highlighted that ensuring a steady pipeline of new projects is essential for the firms to maintain the continued progress.”New Orders rose from the neutral threshold of 50.0 in December to 52.9 in January.
“Many survey respondents highlighted that, alongside foreign-funded construction projects, there has been a continued increase in tendering opportunities from private investors.”Employment index contracted at a slower pace in January, down at 48.5 from 38.2 in December.
Quantity of Purchases index increased during the month, 54.4 in January from 52.9 in December, reflecting the improvement in industry operations.Suppliers’ Delivery Time remained lengthened during the month, registering 52.9 in October.
The industry expectations for the next three months indicate an improvement, according to the statement, as firms expect a gradual increase in government-funded infrastructure projects, contributing positively to the growth in construction industry.
As of early 2025, the Sri Lankan construction sector is showing signs of revival, with reports indicating a gradual expansion and recovery, particularly driven by increased housing demand, growing foreign investment in tourism projects, and opportunities in real estate and mega projects; however, challenges still remain regarding outstanding payments and the need for large-scale projects to sustain growth.
Key points about the Sri Lankan construction sector revival in 2025:
Positive PMI trends:
The Sri Lanka Purchasing Managers Index (PMI) for the construction sector is recording values above 50, signifying expansion and a positive trajectory.
Housing demand:
High demand for housing is a major driver of the construction sector’s recovery.
Tourism-related investments:
Increased foreign investment in tourism projects is boosting construction activity, particularly for hotels and related infrastructure.
Government initiatives:
The government is taking steps to revive stalled housing projects by replacing contractors and facilitating faster project completion.
Challenges to consider:
Outstanding payments:
Delays in government payments to contractors remain a significant obstacle for the industry.
Need for large-scale projects:
While the sector is showing expansion, there is a need for more substantial construction projects to create substantial employment and drive sustained growth.
Regulatory hurdles:
Streamlining approval processes and addressing regulatory complexities could further accelerate the revival.
