Sri Lanka’s construction sector kept growing in August 2026 but at a slower pace, with the Central Bank of Sri Lanka’s Purchasing Managers’ Index for Construction easing to 59.4 from 61.4 in July.
A reading above 50 signals expansion from the previous month. The index, built on the Total Activity Index, had risen for three consecutive months up to July, so August marks the first break in that run.
The Central Bank pointed to one constraint above all others:
“Many survey respondents highlighted the ongoing bitumen shortage, which continued to constrain road construction progress, limiting the overall growth momentum of the construction industry.”
August was the third consecutive month in which firms cited bitumen supply as a drag, Daily FT reported.
New orders up, purchasing and hiring down
The sub-indices moved in opposite directions, with order books strengthening even as activity cooled:
- New Orders rose to 62.5 from 57.1 in July — “mainly driven by the government-funded projects,” the Central Bank said
- Quantity of Purchases eased to 59.4 from 64.7
- Employment slipped to 59.7 from 61.8
- Suppliers’ Delivery Time registered 59.4 from 60.0, reflecting prevailing workloads among suppliers
All four remained in expansion territory.
On hiring, the Central Bank noted that “although many firms continued to report skilled labour shortages,” the Employment Index still expanded. Respondents named persistent shortages of skilled labour and raw materials as the key constraints on sectoral growth, alongside bitumen supply and fluctuations in material prices.
The reading comes as the Central Bank’s Chief Economist cited construction among the Purchasing Managers’ Indices still in expansion territory when arguing that economic momentum is holding up despite the May interest rate increase.
Update, 3 October: contractors expect a pickup, with the same two risks attached
The Daily Mirror has since filed on the survey, confirming the bitumen constraint, the faster growth in new orders, the slower overall expansion against July, the role of government-funded projects and the reported shortages of skilled workers and other building materials.
Its account adds the survey’s forward-looking component, which is absent from the figures above: contractors expect activity to increase over the next three months as newly awarded projects get under way. The two risks they attach to that expectation are the ones already constraining them — the bitumen shortage and changes in material prices.
That is the sub-index worth watching next. Order books strengthened in August while activity cooled; the three-month expectation is contractors saying they read that gap as work not yet started rather than work lost — provided the bitumen arrives.
