Sri Lanka’s construction sector expands, PMI hits 55.6
The Morning: Sri Lanka’s construction sector continued its upward trajectory in February 2025, with the Purchasing Managers’ Index (PMI) for Construction rising to 55.6, signaling sustained expansion, according to the latest Central Bank data.
The sector has now remained in growth territory for consecutive months, supported by increased infrastructure projects, though firms warn that long-term momentum depends on more large-scale developments.
The New Orders Index climbed in February, fueled by government-awarded contracts, particularly in road rehabilitation and irrigation systems. These efforts are in line with broader public sector efforts to revive critical infrastructure post-economic crisis.
Rising demand pushed the Quantity of Purchases Index higher, while Suppliers’ Delivery Time improved, indicating smoother supply chain operations.
Despite growth, the Employment Index dipped further, reflecting cautious hiring practices amid cost pressures.
OSL take:
The ongoing economic activities in the country and the recommencement of development programmes following the 2022 economic crisis faced by Sri Lanka, the steady growth recorded by the country’s construction industry indicates the overall growth and expansion recorded by Sri Lanka’s economy. Sri Lanka’s strategic positioning in the Indian Ocean, the growing trade ties and the target of becoming a regional hub have all attracted the attention of foreign businesses/investors towards Sri Lanka. The steady increase in land value in the country, the increasing house and property projects being carried out and the many infrastructure development projects have all added to the expansion in the local construction industry. These expansions would witness a steady growth as Sri Lanka is fast becoming an emerging regional hub and engaging in the construction industry through the many business/investment opportunities could provide foreign businesses/investors with lucrative business ventures. The growth recorded by local construction businesses present opportunities to also pave the way for foreign businesses/investors to expand operations through local collaborations.
| Article Code : | VBS/AT/20250403/Z_2 |