Construction sector eyes rebound as post-Ditwah rebuild gathers pace

THE construction sector is positioning for a year of renewed execution momentum in 2026, supported by post-Cyclone Ditwah reconstruction, the restart of stalled public projects and improving private-sector conditions, ICC Ltd. Chairman Harsha De Saram said.

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Speaking at the HNB Investment Bank ‘Economic Outlook and Investment Strategy 2026’ forum themed ‘Recovery to Resilience’ last week De Saram said the sector had entered the year expecting a meaningful pickup in activity following substantial infrastructure allocations in the national Budget, before Cyclone Ditwah reshaped priorities and execution dynamics.

He said infrastructure spending planned for 2026, together with reconstruction needs arising from the cyclone, was likely to lift capital expenditure, even if some previously allocated funding was redirected. However, rebuilding would require a fundamental rethink of construction practices.

“You cannot rebuild the way we normally do,” De Saram said, noting that housing, roads, and embankments would need to be designed for more extreme weather patterns and intense rainfall events. This shift would raise costs and extend timelines but was necessary to avoid a repeat of the infrastructure failures seen during the cyclone.

Despite these constraints, De Saram said the industry was better placed to respond than in recent years, with equipment and resources that had remained idle during the downturn now being redeployed.

He pointed to ongoing housing developments in the Western Province, early momentum in Port City projects, the expected midyear restart of major road projects, and delayed ADB-funded irrigation schemes returning to execution.

He also highlighted emerging export opportunities, particularly in design services for European, Australian, and US markets, allowing Sri Lankan professionals to earn foreign currency while remaining based locally. In addition, climate-adaptive construction projects in the Maldives, including modular and floating infrastructure fabricated in Sri Lanka for export, were opening new avenues for the industry.