Sri Lanka’s construction sector kept expanding in September 2026 but slowed for a second straight month, with the Central Bank’s Purchasing Managers’ Index for Construction easing to 57.8 from 59.4 in August.
A reading above 50 signals expansion over the previous month, so the sector is still growing — just less quickly. The index has now eased twice in a row after peaking at 61.4 in July.
The Central Bank attributed the continued expansion mainly to a sustained flow of new projects starting, according to Hiru News, which reported the release on Friday.
Bitumen is still the binding constraint
The Central Bank again singled out the shortage of bitumen in the market, which it said has delayed work on several road construction projects around the country.
That makes September the fourth consecutive month in which firms have named bitumen as a drag on the sector. It is a notable finding given that bitumen imports resumed in mid-October after a seven-month gap — September predates that recovery, so the survey captures the tail of the shortage rather than its resolution.
Order books are strengthening as activity cools
The sub-indices continue to move in opposite directions, the same divergence seen in August:
- New Orders rose to 65.6 from 62.5 in August, expanding at a faster pace on the back of increased government-funded projects
- Quantity of Purchases grew to 62.5, lifted by raw material buying for newly awarded work
- Employment grew more slowly, at 58.1, with firms continuing to report shortages of skilled workers
- Suppliers’ Delivery Time lengthened to 65.6, reflecting supply-side pressure
All four remain in expansion territory. The pattern — orders up, activity down — points to work that has been won but not yet started.
The outlook
Shortages of raw materials and the difficulty of finding skilled labour remain obstacles, the Central Bank said, but expectations for the construction sector over the next three months are positive, on the strength of new projects due to be awarded shortly.
That is the same forward-looking signal contractors gave in August, and it carries the same caveat: it depends on materials arriving.
Not reported
The release as reported does not give the margin by which the overall index is expected to recover, nor a figure for the bitumen shortfall. At the time of writing EconomyNext and Daily FT, which usually carry this survey, had not filed on the September numbers.
