New project awards and improved supply chains fuel growth despite ongoing job cuts
Sri Lanka’s construction sector showed signs of renewed vitality in May 2025, as the Purchasing Managers’ Index for Construction (PMI – Construction) rose sharply to 59.7, indicating a solid recovery following the seasonal lull during April’s festive period.
According to industry survey data, the rebound was largely driven by a spike in new project awards, particularly in road infrastructure development. This surge not only lifted the new orders index but also drove up the quantity of purchases, signaling increased demand for construction materials.
While total construction activity improved, the employment index continued to show contraction. However, the pace of job cuts slowed in May, hinting at a possible stabilization in the sector’s labor market.
Another encouraging development was the shortening of suppliers’ delivery times, suggesting that supply chain disruptions have eased compared to previous months, further supporting the sector’s revival.
With project pipelines expanding and procurement activity rising, stakeholders are cautiously optimistic about sustained momentum through the second half of 2025.