Construction activities continued contraction with the decline in project work
By: Staff Writer
Colombo (LNW): Sri Lanka’s Construction activities continued contraction with the decline in project work, the persistent rain that prevailed during the month of September dampened the progress of the ongoing construction work as well, Central bank disclosed in ite purchasing manager index report.
New Orders continued to decline, yet at a slower pace in September. Many contractors and house builders mentioned that although the tendering opportunities are gradually opening up, especially for some foreign-funded projects, the bid prices are highly competitive.
Meanwhile, Employment in the building construction sector remained contracted since most of the companies preferred to operate with the essential staff. Further, Quantity of Purchases declined during the month, in line with the decrease in construction work, CB revealed.
In the meantime, Suppliers’ Delivery Time remained shortened during the month, mainly due to the lack of demand.
The expectations for the next three months remained positive, mainly owing to the ongoing tender processes and positive developments in the recommencement of certain suspended government-funded projects.
However, the companies are concerned about the upward tendency in energy-related expenses and unfavourable weather conditions
In a bid to revitalise the currently struggling construction sector for survival, the finance ministry is planning to propose catalytic inputs including easing taxation on building materials.
13 far-reaching proposals aimed at increasing the construction industry’s GDP contribution to the economy by providing emergency relief have been submitted to President Ranil Wickemasinghe, Urban Development and Housing Ministry Secretary W.S. Sathyananda disclosed.
20 percent of the country’s population’s livelihood depends on the construction industry and it is essential to prevent the total collapse of this sector from the present set back, he added.
The finance ministry will consider these proposals including the pre-budget submissions of the construction sector stake holders during the budgetary meeting with the high officials of the ministry to devise budget proposals, senior official of the ministry said.
He added that most probably the easing of taxation on building materials specially cement and steel imports will be considered as the committee on public finance has already informed the finance ministry that there have been unusual increases in prices and shortage of the construction materials in the local market.
The proposal of the leading contractors relating to the introduction of a mechanism to use the actual current market prices of construction material while calculating the price variation for reimbursing contractors engage in public projects is also under consideration, he divulged.
Spiraling prices of building materials specially cement and steels in recent times have stalled the building work resulting in 23.1 percent contraction in the construction sector causing a loss of 75 percent of around 1 million workforce, industry stakeholders complained.
Sri Lanka’s building construction work, has had a steep fall of 23.1 percent in the second quarter of 2023 against the same quarter last year, Census and Statistics Department confirmed.