Construction sector shrinks in April as rising raw material costs threaten project timelines

The construction sector in Sri Lanka experienced a sharp contraction in April 2026, with the Purchasing Managers’ Index (PMI) for Construction, measured by the Total Activity Index, plunging to 45.7 from the 57.1 recorded in March.

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According to the latest report issued by the Statistics Department of the Central Bank of Sri Lanka, the deceleration was primarily driven by the seasonal slowdown associated with the Sinhala and Tamil New Year holidays. However, the domestic industry is increasingly grappling with compounding external headwinds, particularly rising material costs and supply chain disruptions linked to geopolitical tensions.

A major concern highlighted by industry stakeholders is the escalating cost of raw materials, largely fuelled by the ongoing conflict in the Middle East. Construction firms reported acute shortages of key inputs, particularly petrochemical-based raw materials, which are challenging the timely execution of planned work.