COLOMBO, Sri Lanka – 31 August 2026 – Sri Lanka’s construction sector continued its robust expansion in July 2026, with the Purchasing Managers’ Index (PMI) for Construction climbing to 61.4. This latest figure, an increase from 60.0 in June, signals a healthy and sustained growth trajectory for the industry, according to data released today by the Central Bank of Sri Lanka (CBSL).
The upward movement in the Total Activity Index reflects a continued flow of construction work across the island. Despite this positive momentum, the sector grapples with persistent challenges, notably input constraints such as the short supply of bitumen and ongoing skilled labour shortages.
Stronger New Orders Drive Expansion
The New Orders Index registered a notable increase to 57.1 in July, up from 54.3 in the previous month. This significant rise underscores the steady inflow of new projects, which has been a primary contributor to the overall expansion of construction activities. Survey respondents highlighted that this consistent demand is crucial for maintaining the sector’s positive trajectory.
Employment Strengthens Amidst Skilled Labour Gaps
The Employment Index also showed positive growth, strengthening to 61.8 in July from 61.4 in June. This indicates an increase in hiring within the construction industry, reflecting the greater demand for labour to fulfil ongoing and new projects. However, the CBSL report notes that many firms continue to struggle with skilled labour shortages, a long-standing issue that can potentially impede project timelines and efficiency.
Procurement Rises, Supply Chains Remain Strained
The Quantity of Purchases Index further increased to 64.7 in July, up from 60.0. This surge in purchasing activity is directly supported by the expanded volume of construction work. Despite increased procurement, the survey highlighted that participants continued to report significant supply shortages and elevated material prices. The Suppliers’ Delivery Time Index, although showing a slower rate of lengthening at 60.0 compared to 62.9 in June, remained high, underscoring ongoing supply chain pressures and delays. The short supply of critical inputs like bitumen was specifically noted as a key constraint.
Positive Outlook with Lingering Concerns
Looking ahead, expectations for construction activities over the next three months remain broadly positive. Optimism is largely fueled by the anticipated awards of upcoming projects, which are expected to sustain demand. Nevertheless, industry stakeholders expressed ongoing concerns regarding the consistent availability of inputs, which continues to be a crucial factor for maintaining the sector’s growth momentum.
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