Construction activity continued to expand in July 2026, with the Sri Lanka Purchasing Managers’ Index (PMI) for Construction rising to 61.4.
The Total Activity Index remained above the 50-point level that separates expansion from contraction.
The latest reading shows that construction companies continued to receive work despite pressure on supplies and labour.
Several businesses reported a steady flow of construction projects during the month. However, shortages of key materials, particularly bitumen, remained a concern.
New projects keep activity moving
The flow of new projects helped push the New Orders Index higher in July.
Construction companies also increased their purchases as more work became available. The Quantity of Purchases Index rose further during the month.
Employment also improved.
The Employment Index strengthened in July, although many construction firms continued to report a shortage of skilled workers.
This shortage could become more important if the number of new projects continues to rise.
Material costs remain a concern
While companies are taking on more work, supply conditions remain difficult.
Survey respondents reported shortages of construction materials and higher material prices. Bitumen remained one of the key supply concerns.
The Suppliers’ Delivery Time Index also remained high in July, pointing to continued pressure on the supply of construction inputs.
For construction companies, securing materials at the right time and cost remains important as activity expands.
Outlook remains positive
Construction firms remain hopeful about the next three months.
Expectations are supported by the possibility of new project awards and a continued flow of work.
However, businesses remain concerned about securing enough inputs to maintain that activity.
The July PMI therefore presents a mixed picture: construction demand is growing, but supply and skilled labour shortages could limit how quickly companies can respond to new work.
Last modified: September 1, 2026
