In January 2026, Sri Lanka’s construction sector witnessed a significant surge in activity, as indicated by a rise in the Purchasing Managers Index (PMI) to 75.0 from December’s 67.1, according to data compiled by the central bank. This marks the second-highest reading on record, following the peak of 75.7 in July 2020.

The central bank reported that the increase in construction activity was driven by the initiation of new projects at the start of the year. Furthermore, reconstruction efforts have been underway following the damage caused by Cyclone Ditwah to infrastructure and buildings in late November. These ongoing post-cyclone reconstruction activities are anticipated to further boost construction momentum.

The Employment Index showed expansion compared to the previous month, indicating higher hiring levels within the sector. Nevertheless, many firms highlighted ongoing challenges in recruiting employees for various skilled occupational categories, as noted by the central bank.

The New Orders sub-index also expanded, reflecting increased project availability across most construction segments. It registered a value of 77.8, up from December’s 67.1. Additionally, the Quantity of Purchases Index saw further growth, as companies continued to build up inventories in preparation for scheduled projects. This sub-index reached 65.3, an increase from the previous month’s 54.2.

Conversely, the Suppliers’ Delivery Time Index indicated prolonged delivery times, with a registration of 54.2 in January compared to 56.9 in December.

(Colombo/Feb27/2026)