Contraction in construction sector continues

Monday, 1 January 2024 04:55 - - {{hitsCtrl.values.hits}}

The construction sector saw its contraction continue in November too as per the Purchasing Managers’ Index (PMI) compiled by the Central Bank.

It said the Construction PMI recorded a Total Activity Index value of 44.3 in November 2023, indicating a contraction in construction activities compared to last month.

“The respondents mentioned that the low level of new projects and the decline in work related to ongoing projects, as they are in the final stages, hampered the activity levels,” CBSL said.

It said new orders declined at a higher pace in November compared to the previous month. However, many respondents expect an acceleration in awarding of projects, especially Government-funded projects in the first half of the next year.

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. Suppliers’ delivery time remained lengthened during the month.

CBSL said the industry outlook for the next three months is positive, mainly in anticipation of the increased demand from the 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.