Construction market to grow 5% from 2025

Sri Lanka’s construction market which was valued at USD 10 billion in 2023 is expected to grow 5% annually from 2025 to 2028 and this will be driven by public and private investment in energy, especially renewable projects said Prof. Wasantha Athukorala delivering the keynote speech at the 20th AGM of the Chamber of Construction Industry of Sri Lanka (CCI).

Prof. Athukorala said the construction industry is vital for economic growth, employment and infrastructure development but the economic crisis resulted in severe setbacks in Sri Lanka’s construction activities due to supply and demand contraction with shortages of raw materials and fuel, soaring input costs, lack of supplier credit and overdue payments on government projects. Although 85-90% of the outstanding payments have now been settled, as a result of the crisis the construction sector which reported a 27.3% growth in 2017 has turned into a -20.8% growth industry in 2023.

While pointing out that the construction industry which was 12.2% of the GDP in 2017 has reduced to 6.2% to the GDP in 2023, Prof Athukorala opined that with debt restructuring, foreign funded projects will start again and although government investments remain without any progress private sector investments will increase gradually with more investments in renewable energy, railway and hotel sector. He said there is a visible and invisible economy with positives and negatives such as low inflation level of 2.5% average in July, low interest rates (SDR 8.25%), normal money transfers and low risk levels of banks (Capital Adequacy Ratio 17.7%).

However there were also severe invisible implications to the economy that include the increase of price level by 106% (food 134% and non food 89%), 20% of SMEs getting either permanently or temporarily shut down (260,000 SMEs) and many more.

In Addition he said approximately 486,838 have lost their jobs, 66% having to work for more than 40 hours per week (an increase of 700,000) and several other issues as well.

Chamber of Construction Industry of Sri Lanka President Arct. Jayantha Perera, said the first task that the newly appointed President need to do was eradicate corruption in the country.

“ Our industry is just coming out of the major crisis it had mainly due to Covid 19 and the economic crisis in 2022. All the stakeholders of the Construction Industry were severely affected in all facets of the industry; the present existence of the Chamber is purely due to our members and staffs’ best commitment to the industry by means of diligently attending and defining issues at Board Meetings, Council Meetings and the general events and duties of the Chamber. Also, we managed to achieve following significant milestones in spite of the difficulties encountered such as : Formal recognition by incorporation of the Chamber by an Act of Parliament, achieving a permanent allocation for Chamber’s Secretariat Building at Colombo 05 and obtaining necessary permissions to proceed.”

Perera said they also had effective interaction with government authorities to address the recurrent issues particular to the industry by meeting and making representations to the President, Prime Minister, Line Ministers, CIDA Advisory Panel, CIDA Management Board and Joint Chambers etc. He said now that the industry is slowly coming out of the worst period, he proposed to the Chamber to establish a process among the stakeholders, an understanding to work together and to promote a fairer distribution of work among all stakeholders to the construction process.

The post Construction market to grow 5% from 2025 appeared first on DailyNews.