The construction sector in Sri Lanka has shown continued growth, according to a latest report released by the Central Bank of Sri Lanka.
The overall activity index for the construction sector recorded a value of 57.1 in March, which indicates that activity in the sector has continued to increase, albeit at a slightly slower pace compared to the previous month. With the report, the new orders index, which recorded a value of 67.2, confirms that new project awards in the sector are at a high level. Meanwhile, the employment index (57.1) and the inventory purchases index (55.7) have both increased at a higher rate than the previous month. This implies that companies are trying to maintain their workforce and raw material stocks despite the prevailing uncertain environment.
Respondents to the survey indicated that the conflict situation in the Middle East region has also had a direct impact on the construction sector in the country. This has created a challenging environment of fuel and raw material shortages, supply constraints and rising costs. The report states that the time it takes for suppliers to deliver orders (71.4) has increased significantly due to transport delays in particular.
Many construction companies are already trying to accumulate stocks due to fears that raw material prices will increase further in the future. While the outlook for the coming quarter remains optimistic, the Central Bank of Sri Lanka says that there is also a decrease in those expectations due to uncertainty over the global geopolitical situation. A reading above 50 on the Construction Purchasing Managers’ Index indicates growth in the sector, while a reading below 50 indicates contraction.
Source : Daily News