Local construction sector sees activities dampen in November

After reaching neutrality last month, Sri Lanka’s construction sector in November 2023 saw activities contract, due to a low level of new projects and the decline in work related to the ongoing projects.
According to the Construction Purchasing Managers’ Index (PMI) compiled by the Central Bank every month, the industry has recorded an index value of 44.3 in November, from 50.0 index points in October.
In the PMI, a value of 50.0 indicates a neutral level, signifying neither expansion nor contraction, while values above 50 suggest expansion and values below 50 indicate a decline in the respective economic activity. 
While New Orders declined at a higher pace in November compared to the previous month, many respondents expect an acceleration in the awarding of projects, especially government-funded projects, in the first half of next year, the Central Bank said. 

Employment continued to contract, as the companies tend to operate with minimum staff under the current industry situation. Further, Quantity of Purchases declined in line with the decrease in construction work. In the meantime, Suppliers’ Delivery Time remained lengthened during the month. 
The industry outlook for the next three months is positive, mainly in anticipation of the increased demand from next year, together with favourable weather conditions. However, the firms are concerned about the upward tendency in material prices, due to the announced tax revisions.