Sri Lanka’s construction sector expanded at a faster pace in July, with the Central Bank’s Purchasing Managers’ Index for Construction rising to 61.4 from 60.0 in June.
Any reading above 50 signals expansion, and the index has now been comfortably above that mark for several months. The Central Bank released the figures on Monday, EconomyNext reported.
Orders and purchasing led the increase
Every major sub-index moved in the same direction:
- New Orders rose to 57.1 from 54.3, which the Central Bank attributed to a “steady inflow of new projects.”
- Quantity of Purchases posted the strongest gain, climbing to 64.7 from 60.0, as firms bought more material to meet the higher workload.
- Employment strengthened marginally, to 61.8 from 61.4.
- Suppliers’ Delivery Time eased to 60.0 from 62.9, though deliveries remained lengthy.
The Daily Mirror reported that surveyed companies described a sustained flow of work through the month despite input constraints.
The constraints have not gone away
The Central Bank quoted respondents as highlighting continued work “despite input constraints, particularly the short supply of bitumen” — the binder used in road surfacing, and the single input firms named specifically.
Two other pressures persist. Companies continued to report shortages of construction materials generally, alongside elevated input prices. And despite the improvement in the employment index, firms reported ongoing shortages of skilled labour, which the Daily Mirror noted could limit the sector’s ability to meet rising demand.
That combination — rising orders against constrained inputs — is why a higher headline reading does not straightforwardly mean an easier operating environment.
Outlook
Construction firms remained optimistic about the next three months, expecting further project awards, though the Daily Mirror said concerns persisted over securing a steady supply of inputs.
The survey covers about 35 of the highest-graded local construction companies registered with the Construction Industry Development Authority, so it reflects the formal, large-contractor end of the sector rather than smaller builders.
Context
The sector’s recovery has been uneven. The construction PMI contracted in April and expansion had slowed in March before the current run of improvement.
The bitumen constraint connects to a wider input problem the industry has flagged this year, with the Road Development Authority previously looking at alternative sourcing for tar imports amid Middle East supply disruption.
What was not reported
Neither outlet gave the value of new project awards, named the projects driving the order inflow, or said whether the bitumen shortage is a pricing or an availability problem. Neither reported what proportion of the surveyed firms cited each constraint, nor whether public-sector or private-sector work accounts for the increase.
