Construction sector begins hiring again after years of hiatus  

The construction sector has begun to hire people after a prolonged period of either laying off or operating with limited staff due to economic crisis and also the lack of certainty over the continued availability of large projects even after the sector came back recovering about 18 months ago.

According to the construction sector Purchasing Managers’ Index (PMI), the sector has extended expansion through June 2025 on favourable industry conditions, particularly seen from the steady flow of project work and stable prices.

The index came in at 58.6 for June, slightly down from 59.7 index points in May.

In PMI, an activity is identified having expanded when the index comes above 50.0 levels while index below 50.0 indicates a contraction. The index at 50.0 levels shows a neutral level for an activity from the previous month.

Despite the recent recovery in the sector, the developers shunned new hires as they weren’t so certain about the durability of the sector recovery.

They until recently complained about the lack of large projects for them to be fully confident about the ability to carry new hires in their payroll.

But as the new projects become increasingly available, particularly in road construction, the sector grew more confident about its recovery and their ability to provide sustainable new employment opportunities.

During the economic crisis in 2022 and most of 2023, major infrastructure development projects came to a standstill and many lost jobs while some left the country seeking employment.

According to the PMI survey, several construction firms have said that negotiations are going on to recommence some of the temporarily halted construction projects. The government has allocated about Rs.1.3 trillion for public investments for 2025, making it the largest ever allocation from a national budget.

But it remains to be seen if the entire allocation could be spent by the fiscal year’s end.

In the first quarter of 2025, the construction sector which accounts for 6.8 percent of the Gross Domestic Product expanded by 10.7 percent from the same period year ago.

Most of the firms who took part in the PMI survey have expressed optimism about the next three months, mainly due to the availability of new projects.