Local construction sector weathers flood disruptions

Sri Lanka’s construction sector, which has been expanding at a robust pace over the last two years, managed to avoid the worst of the flood-related disruptions to its work, with activities expanding at an even faster pace than in November.

​The construction sector Purchasing Managers’ Index (PMI) for December 2025 recorded a value of 67.1, up from 66.2 in November.

​“A majority of firms reported a notable expansion in construction activities during the reference period, despite initial operational disturbances caused by adverse weather conditions,” the Central Bank stated. ​In PMI terms, an index value above 50.0 indicates expansion, while a value below 50.0 signifies contraction. A value of 50.0 is considered neutral.

​Construction sector participants noted an increase in the availability of projects in December, driven by both government-funded initiatives and private sector engagements.

​The floods that occurred in late November and early December are expected to bode well for construction sector activities, as massive rebuilding and reconstruction efforts are likely to provide a fillip to the already expanding sector.

​The government has allocated Rs. 1.4 trillion for public expenditure in 2026 - the highest ever annual allocation in a budget - while an additional Rs. 500 billion was approved to address flood-related events. ​Meanwhile, private building activities are also being ramped up in the residential and commercial sectors.