The Sri Lanka Purchasing Managers’ Index for Construction (PMI – Construction), as reflected by the Total Activity Index, recorded a value of 70.3 in February 2026. This indicates continued expansion in construction activities, albeit at a slower pace compared to the significantly higher level observed in the previous month. Most firms reported favourable industry conditions in February, underpinned by steady inflows of construction projects and favourable weather.

Domestic macrofinancial conditions strengthened further in 2025, supporting continued credit expansion, although external vulnerabilities remained a concern. Credit growth accelerated markedly, with total credit extended by banks and Finance Companies (FCs) rising by end 2025. The financial sector’s exposure shifted further toward the private sector, driven by strong private sector credit growth, while exposure to the public sector contracted reflecting ongoing fiscal consolidation. Despite the decline, government related exposure remains sizeable. Financial intermediation improved, as reflected by the continued rise in the banking sector’s credit to deposits ratio.