Construction activity in Sri Lanka continues to expand in February

• but employment lags

Sri Lanka’s construction sector continued to expand in February, with increased construction activity reported by most respondents, according to the Central Bank.    
The sector PMI, the monthly gauge of construction sector health, as reflected by the Total Activity Index, rose to 55.6 in February 2025, indicating further expansion.  In January 2025, the sector recorded an index value of 52.9.    
Under PMI, an index value above 50.0 indicates an expansion.    
“Most of the respondents reported a continuous increase in construction work during the month, yet emphasised the need for more large-scale projects to sustain the growth,” the Central Bank said.    
New orders increased in February, driven by the awarding of projects, particularly for rehabilitating roads and irrigation systems.  The Quantity of Purchases and Suppliers’ Delivery Time indices also expanded during the month.  However, the Employment index further contracted, reflecting conservative hiring practices.    
Firms anticipate an increase in government involvement in the construction industry for the remainder of the year.  The outlook for construction activities for the next three months remains positive.