Colombo, 30 September 2026 – Sri Lanka’s construction sector continued its growth momentum in August 2026, as the Purchasing Managers’ Index (PMI) for Construction recorded 59.4. This indicates an ongoing expansion in total activity, albeit at a slightly slower pace than the previous month, according to the latest data released by the Central Bank of Sri Lanka (CBSL) Statistics Department.
The Total Activity Index, the headline figure for PMI – Construction, registered 59.4 in August, down from 61.4 in July 2026. Despite this deceleration, the index remains comfortably above the 50-point neutral threshold, signaling sustained positive performance within the industry. However, survey respondents consistently highlighted the persistent bitumen shortage as a significant impediment, continuing to constrain road construction progress and limiting the overall growth momentum of the sector.
Key Indicators Reflect Mixed Trends
An analysis of the sub-indices reveals varied movements:
- New Orders: This index saw a notable increase, rising to 62.5 in August from 57.1 in July. This growth was primarily fueled by new government-funded projects, providing a crucial boost to the sector.
- Employment: The Employment Index remained in expansion territory, though it saw a slight decrease to 59.7 from 61.8 in the preceding month. This indicates a continued, albeit slower, increase in staffing levels.
- Quantity of Purchases: Similar to employment, the Quantity of Purchases Index also remained expansive but slowed down, moving from 64.7 in July to 59.4 in August.
- Suppliers’ Delivery Time: The index for Suppliers’ Delivery Time recorded 59.4, indicating that delivery times continued to lengthen, albeit at a slower rate than in July (60.0). This points to ongoing logistical challenges for suppliers.
The CBSL report underscores that persistent shortages of skilled labour and raw materials remain key constraints for contractors, impeding project execution and overall operational efficiency.
Positive Outlook Tempered by Supply Challenges
Looking ahead, expectations for construction activities over the next three months remain positive. This optimism is largely underpinned by the pipeline of newly awarded projects, suggesting a continued stream of work for the industry. Nevertheless, the perennial issues of bitumen shortages and fluctuations in material prices are anticipated to persist, posing ongoing challenges for contractors and potentially impacting project timelines and costs.
Global Context for Construction PMIs
Globally, the construction sector presented a mixed picture as of 30 September 2026. While Sri Lanka’s construction activities continued to expand, several major economies in the Eurozone, including France, Italy, and the UK, reported falling PMIs, with some experiencing higher rates of contraction. Germany saw a falling but slower rate of contraction, while Ireland also reported rising, but slower, rates of growth. This divergence highlights the unique economic dynamics at play in different regions.
The CBSL’s PMI survey for Construction is compiled using a methodology consistent with S&P Global’s international best practices, targeting high-graded local construction companies to capture month-on-month developments in the sector.
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