A shortage of bitumen caused by disruptions to imports from the Middle East continues to delay several road construction projects in Sri Lanka, despite overall growth in the country’s construction sector, according to the Central Bank of Sri Lanka (CBSL).
In its latest Purchasing Managers’ Index (PMI) report for September 2026, the Central Bank identified the shortage of bitumen, a key material used in road construction, as a major constraint affecting ongoing projects.
The report revealed that Sri Lanka’s construction sector continued to expand in September, recording a PMI of 57.8, compared to 59.4 in August.
Although the index remained above the 50-point threshold indicating expansion, the decline reflected a slower pace of growth.
The shortage of bitumen has been linked to the ongoing conflict in the Middle East and disruptions to shipping through the Strait of Hormuz, which have affected supplies from Iran, a major source of bitumen for Sri Lanka.
According to the Road Development Authority (RDA), imports from Iran have been disrupted since February/March 2026, creating difficulties for road maintenance and development projects.
RDA Director General N. A. Hettiarachchi previously stated that Sri Lanka requires at least 20,000 metric tonnes of bitumen every month for road maintenance and development activities.
The RDA has begun sourcing limited quantities from alternative markets, including Kazakhstan, Bahrain, China, India, Malaysia and Thailand. However, shipping difficulties and insurance restrictions linked to the Middle East conflict have complicated efforts to secure adequate supplies.
Meanwhile, the Central Bank said overall construction activity was supported by a sustained flow of new projects, particularly government-funded developments.
The New Orders Index increased from 62.5 in August to 65.6 in September, reflecting stronger demand for construction work.
However, the sector continued to face challenges, including shortages of construction materials and skilled workers.
The Employment Index stood at 58.1 in September, indicating continued recruitment, although many construction companies reported difficulties in finding skilled labour.
Suppliers’ delivery times also lengthened further, reflecting continued supply-side pressures.
Despite these challenges, construction companies remained optimistic about activity over the next three months, supported by newly awarded projects.
The Central Bank noted that material availability and skilled labour shortages remained ongoing challenges for the sector. (Newswire)