Following 11 consecutive months of deflation, headline inflation, as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2021=100)  returned to the positive territory in August 2025, recording 1.2%, compared to the deflation of 0.3% in July 2025.

The Sri Lanka Purchasing Managers’ Index for Construction (PMI – Construction), as reflected by the Total Activity Index, increased to 60.0 in July 2025, indicating a continuous expansion in construction activities. Many firms reported a steady increase in the availability of construction projects, signalling the positive growth momentum in the industry.

Most of the respondents highlighted a growth in road development and private sector projects in July, which contributed to a further increase in the New Orders Index during the month. Meanwhile, the Employment Index remained at a neutral level in July, reflecting stable employment conditions during the month. The Quantity of Purchases Index continued to expand, while the Suppliers’ Delivery Time Index remained extended during the month.