Sri Lanka’s construction sector continued its growth trajectory in June 2026, with the Purchasing Managers’ Index (PMI) for Construction reaching 60.0, up from 59.1 in May. This latest figure, released by the Central Bank of Sri Lanka (CBSL) on July 31, 2026, signals a sustained and healthy expansion in construction activities across the island.
The headline PMI – Construction, reflected by the Total Activity Index, demonstrated continued buoyancy. According to the CBSL report, most survey respondents attributed this positive performance to the ongoing execution of construction projects that had been awarded in preceding months, indicating a robust pipeline of work driving current activity.
Key Sub-Indices Reveal Sectoral Dynamics
An analysis of the sub-indices provides a deeper insight into the sector’s operational landscape:
- New Orders: The New Orders Index continued to expand, albeit at a slower pace compared to the previous month’s high. This follows a significant level of project awards recorded earlier, suggesting a period of consolidation after strong order inflows.
- Employment: The Employment Index saw a further increase in June, as construction firms actively ramped up staff recruitment to meet demand. However, a persistent challenge highlighted by many survey respondents was the ongoing shortage of skilled construction workers, posing a potential bottleneck for accelerated growth.
- Quantity of Purchases: Mirroring the increase in overall construction activities, the Quantity of Purchases Index also rose. Despite this, the sector faced headwinds from shortages of key raw materials, particularly bitumen, which continued to restrain the pace of work.
- Suppliers’ Delivery Time: The Suppliers’ Delivery Time Index remained elevated in June, largely due to ongoing supply disruptions. These logistical challenges, coupled with raw material shortages, collectively impacted operational efficiency.
Positive Business Sentiment Despite Bottlenecks
Despite the challenges posed by input shortages and supply chain disruptions, business sentiment among construction firms remains notably positive for the quarter ahead. This optimism is primarily underpinned by a healthy pipeline of work, which is expected to sustain activity in the coming months.
The report also offered a brief look at the global context, noting that while Sri Lanka’s construction sector expands, many economies in the Eurozone, including France, Germany, and Italy, were experiencing contractions or falling rates of growth in their respective construction PMIs during the same period. This contrast highlights the relative resilience and growth momentum observed in Sri Lanka’s construction industry.
The CBSL’s Purchasing Managers’ Index for Construction is a diffusion index, with a value above 50 indicating expansion, 50 indicating neutrality, and below 50 indicating contraction on a month-on-month basis. The survey targets highest-graded local construction companies registered with the Construction Industry Development Authority.
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