COLOMBO, 30 September 2026 – Sri Lanka’s construction industry continued its expansionary trend in August 2026, with the Purchasing Managers’ Index (PMI) for Construction recording 59.4. This indicates a sustained period of growth, though at a slightly moderated pace compared to the previous month, according to the latest data released by the Central Bank of Sri Lanka (CBSL).
Continued Expansion Amidst Challenges
The Total Activity Index, the headline indicator for PMI – Construction, registered 59.4 in August, signaling robust activity within the sector. While this marks a continued expansion, it represents a slight deceleration from July’s figure of 61.4. A key constraint highlighted by many survey respondents was the ongoing shortage of bitumen, which continues to hinder progress in road construction projects and thereby limits the overall growth momentum of the industry.
Key Indicators: New Orders, Employment, and Purchases
Drilling down into the sub-indices, the New Orders Index experienced a significant increase, rising to 62.5 in August from 57.1 in July. This boost was primarily attributed to the influx of new government-funded projects, signaling strong demand from the public sector. Both the Employment Index (59.7) and the Quantity of Purchases Index (59.4) also remained firmly in expansion territory, indicating continued hiring and procurement activities within construction firms.
Despite these positive indicators, the sector continues to grapple with persistent challenges. Survey respondents frequently cited shortages of skilled labour and raw materials as ongoing impediments to smooth operations. Furthermore, the Suppliers’ Delivery Time Index recorded 59.4, indicating a lengthening of delivery times for materials and components, reflecting increased workloads among suppliers.
Positive Outlook with Lingering Headwinds
Looking ahead, expectations for construction activities over the next three months remain positive, largely underpinned by newly awarded projects. However, the industry anticipates continued challenges from the persistent bitumen shortages and potential fluctuations in material prices. These factors are expected to exert pressure on project timelines and budgets.
In a global context, while many economies like the Eurozone, France, Germany, Ireland, Italy, and the UK saw their PMIs falling or rising at a slower rate, Sri Lanka’s construction sector demonstrated resilience by maintaining an expansionary trajectory.
The PMI for Construction is calculated as a diffusion index, where values above 50 indicate a general expansion of the sector on a month-on-month basis, while values below 50 suggest contraction. The survey targets top-graded local construction companies registered with the Construction Industry Development Authority.
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