- Weak State spending weighs on sector
- Cement consumption sees approx. 9% increase, driven by retail
- Steel consumption sees marginal increase
While Sri Lanka’s residential construction sector is showing signs of movement, the country’s heavy construction segments have yet to gain momentum due to lacklustre State spending, the Chamber of Construction Industry (CCI) of Sri Lanka reveals.
Speaking to The Sunday Morning Business, CCI Secretary General and Chief Executive Officer Eng. Col. (Retd) Nissanka N. Wijeratne explained that cement consumption served as a good indicator to gauge the performance of the construction industry, while steel consumption was a good indicator to monitor the performance of the heavy construction industry.
He explained that this distinction was significant, as residential construction did not use steel and relied mainly on cement, among other construction inputs, whereas heavy construction was steel-intensive.
“Cement consumption has increased by around 9% so far this year compared to last year, but that increase has come from the retail sector and not from bulk buyers.
“This means the demand is coming from residential projects and that larger construction projects have yet to commence in earnest,” he said.
With regard to steel consumption, he said that the increase had been marginal, indicating that the heavy construction industry had yet to start moving properly.
Turning to the wider industry, Wijeratne pointed out that despite the increased capital expenditure allocated under the 2026 Budget, a large portion of it remained unspent.
“Capital expenditure allocation has been increased, but the problem is, how much of that has been spent? Less than 50%. They had allocated around Rs. 1,500 billion. Out of that, not even 50% has been spent,” he claimed.
Wijeratne added that the situation had been worse in 2025, when only around 40% of the capital expenditure allocation had been spent during the year. Therefore, he stated that merely allocating amounts under the budget was meaningless if that amount was not spent on the ground.
He further claimed that the reason for such underspending was the overcautious approach adopted by most Cabinet-appointed tender boards, procurement committees, and technical evaluation committees overseeing construction projects.
As a result, he said, they had been reluctant to make recommendations, while the ministry had failed to take action.
Wijeratne also said that the CCI would not be submitting any proposals for the upcoming 2027 Budget, as the proposals it had submitted over the last two to three years had been ignored.