Construction sector picks up speed in July despite supply constraints

Sri Lankan construction output accelerated during July, driven by consistent project pipelines, even as persistent input deficits and high costs weighed on industry momentum.

Data released by the Central Bank indicates that the Purchasing Managers' Index for construction advanced to 61.4 points in July compared with 60.0 points in June, staying securely above the neutral 50-point dividing line.

Survey participants highlighted a continuous volume of site work throughout the month despite supply chain hurdles, specifically pointing to scarce bitumen supplies.

New contract intakes grew more rapidly, pushing the relevant sub-index up to 57.1 from the previous month's 54.3 due to a continuous influx of assignments.

Workforce levels experienced slight growth as the employment index ticked upward to 61.8 from 61.4.

At the same time, industry players continuously cited deficits in skilled workers, a factor that might constrain the sector's capacity to satisfy growing work volumes.

Material purchasing showed the most substantial recovery among evaluated metrics, surging to 64.7 in July from 60.0 in the preceding month as firms stepped up procurement to match expanding site operations.

Nevertheless, survey participants continued highlighting material scarcity and high input expenses as ongoing challenges.

Vendor delivery schedules stayed extended, although the corresponding index moderated to 60.0 down from June's 62.9 reading.

Builders maintained positive sentiments regarding operations over the upcoming quarter, fueled by anticipations of fresh contract awards.

Despite this optimism, worries remained regarding reliable access to essential construction resources.

The central bank survey tracks approximately 35 top-tier domestic builders registered under the Construction Industry Development Authority.