Sri Lanka Construction Industry Report 2025: Output to Grow by 7.9% in Real Terms This Year, Supported by an Increase in Gross Fixed Capital Formation and Public and Private Sector Investments - ResearchAndMarkets.com

The "Sri Lanka Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis to 2029 (H1 2025)" report has been added to ResearchAndMarkets.com's offering.

The analyst expects Sri Lankan construction industry to grow by 7.9% in real terms in 2025, supported by an increase in gross fixed capital formation and public and private sector investments in transport infrastructure and energy projects, coupled with recovery in tourism sector which will create demand for new hospitality, leisure, and retail developments.

According to the Department of Census and Statistics (DCS), the construction industry's value-add grew by 27.1% year on year (YoY) in Q4 2024, preceded by YoY growth rates of 22.9% in Q3 2024 and 14.4% in Q2 2024. Moreover, the gross fixed capital formation grew by 19.8% in Q4 2024, preceded by YoY growth of 27.1% in Q3 and 18.6% in Q2 2024.

Additionally, the Clean Sri Lanka Program, a comprehensive national initiative, launched in January 2025 under the National People's Power (NPP)-led government, will run for three years (2025-2027), supporting the growth of the construction industry. The program is designed to benefit all regions of Sri Lanka, including urban centers, rural communities, and environmentally sensitive areas such as beaches and forests. Through the Clean Sri Lanka Program, the government is set to introduce 34 new projects with a budget of LKR17.8 billion ($59.5 million) in 2025.

Over the remainder of the forecast period, the construction industry is expected to record an average annual growth rate of 5.2% from 2026 to 2029. This will be supported by public and private investments in industrial, infrastructure and energy construction projects, alongside the government's commitment to support renewable energy development.

The country aims to generate 70% of its electricity from renewable sources by 2030. In November 2024, the Asian Development Bank (ADB) approved a LKR60 billion ($200 million) loan to support Sri Lanka's efforts to modernize its power grid and expand renewable energy projects. The loan is divided between two main electricity providers in the country, with LKR45 billion ($150 million) allocated to the Ceylon Electricity Board (CEB) and LKR15 billion ($50 million) to the Lanka Electric Company (LECO). This funding aims to improve the reliability and efficiency of Sri Lanka's electricity system, facilitate the integration of more renewable energy sources like solar and wind, and reduce power outages and energy losses.

Moreover, the government investments under the Urban Regeneration Programme (URP), which aims to improve housing conditions for low-income families living in underserved settlements in and around Colombo are expected to support construction industry output. Under the program, the government plans to construct an additional 5,500 affordable housing units in 2025. This initiative focuses on relocating families from substandard housing into new multi-story apartment complexes, thereby increasing land use efficiency and freeing up centrally located land for redevelopment.

Scope

• Historical (2020-2024) and forecast (2025-2029) valuations of the construction industry in Sri Lanka, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
• Assess market growth potential at a micro-level with over 600 time-series data forecasts
• Understand the latest industry and market trends
• Formulate and validate business strategies using the analyst's critical and actionable insight
• Assess business risks, including cost, regulatory and competitive pressures
• Evaluate competitive risk and success factors

Key Topics Covered:

1 Executive Summary

2 Construction Industry: At-a-Glance

3 Latest news and developments

4 Project analytics

5 Construction Market Data

6 Risk Profile

7 Appendix

For more information about this report visit https://www.researchandmarkets.com/r/ntt8ta

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