Governor of the Central Bank of Sri Lanka (CBSL), Dr. Nandalal Weerasinghe, emphasized the need for a cost-effective and sustainable construction sector in Sri Lanka, outlining the challenges and opportunities facing the industry.
Speaking at ‘Construction Expo 2025,’ Dr. Weerasinghe highlighted the importance of aligning with global trends by incorporating energy-efficient solutions and environmentally friendly building practices. He clarified that his views were personal observations rather than official CBSL policy and stressed that sustainability should apply to both new developments and existing structures.
He acknowledged that the construction sector has been significantly impacted by economic difficulties in recent years. Factors such as reduced public investment, high material costs, and dependence on government-funded projects have strained the industry. Additionally, fiscal constraints limited infrastructure spending, delaying contractor payments. However, he assured that outstanding arrears had now been cleared, helping stabilize the sector.
Material costs surged due to foreign exchange shortages, leading to higher prices for construction materials. Currency depreciation, high interest rates, and increasing financing costs further exacerbated these challenges. Dr. Weerasinghe noted that the construction industry had been among the hardest hit by these economic pressures.
On a positive note, he pointed out that the 2025 national budget allocates Rs. 1.3 trillion for public investment, with a significant portion directed toward construction projects. This allocation includes resumed projects previously suspended due to financial constraints. Additionally, foreign-funded projects are expected to restart, which should provide further economic stimulus.
Despite these positive developments, Dr. Weerasinghe cautioned against excessive reliance on government funding. He urged the industry to diversify by exploring private-sector partnerships and export opportunities, as no economy can sustain a construction sector solely dependent on public investment.
Another challenge he addressed was the high cost of construction in Sri Lanka, which remains elevated compared to similar economies in the region. He stressed the need for greater efficiency in resource utilization and suggested that industry stakeholders focus on maximizing output per rupee spent.
A major issue affecting the industry is the shortage of skilled labor. Dr. Weerasinghe emphasized the need for government-led training programs to enhance the skills of workers and promote technological advancements. He noted that Sri Lanka’s construction sector employs a disproportionately large workforce compared to global standards, and adopting modern technologies could improve productivity while reducing labor dependency.
He also pointed out that low wages deter young people from joining the industry. By equipping workers with better skills and integrating advanced technologies, the sector could offer more attractive salaries, encouraging greater participation from the workforce.Dr. Weerasinghe concluded by advocating for long-term policy reforms to make Sri Lanka’s construction sector more competitive, sustainable, and cost-efficient. He emphasized that a well-functioning industry benefits all stakeholders, from low-income households to large-scale industrial projects, reinforcing the importance of modernization and strategic planning for future growth
