Overview
Construction activities suffered a severe setback due to supply and demand contraction in the wake of the economic crisis. Shortages of raw material and fuel together with soaring input cost, lack of supplier credit and overdue payments on completed government projects was key to the subdued growth in the sector.
The Sri Lankan construction industry, which is one of the biggest GDP contributors and employment generators in the country, faced significant challenges in 2022 with availability of cement recording a steep decline of 35 percent over the previous year. Due to rising raw material costs and a fuel and energy shortage, there was considerable job losses and a sharp drop in construction projects.
According to recent Central Bank reports, the sentiment amongst the firms towards the short to medium term is positive due to the expected recovery in the economy, the decrease in interest rates and material costs, and current negotiations on the recommencement of suspended government- funded projects.
Leading Sub-Sectors
- Equipment sales
- Engineering, procurement, and construction
- Direct contracting
Opportunities
U.S. companies have significant opportunities to sell a range of equipment and technology, ranging from earth-moving equipment and building appliances to heating, ventilation, and air conditioning (HVAC) systems. Buyers are often price sensitive, but high-end developments have more leeway to purchase high quality products and services.
Sri Lankan developers also frequently team up with U.S. engineering and design firms, especially for high-end office buildings, luxury apartments, or resorts.