ECONOMYNEXT – Sri Lanka’s main construction firms have requested to import 7,500 workers with the sector projected to have a shortfall of 20,000 staff in 2026, Secretary to the Ministry of Housing and Construction Kumudu Lal Bogahawatta said.
The construction industry already has vacancies of around 10,000 workers, officials said.
“There are human resource problems in the construction industry,” Bogawatta told reporters in Colombo.
“One is the trend seen in recent times of engineers leaving the country. Though about 1,400 engineers pass out only a small number remains in the country.”
“At other levels, there is a big shortage of construction tradesmen and their assistants.”
Sri Lanka is now recovering from an economic contraction and external default triggered by rate cuts made in 2020 for flexible inflation targeting and potential output targeting.
Importing Labour
“We think there is a requirement for about 20,000 workers this year,” Bogahawatte said.
“If we can connect 20,000 new workers that will be a big relief.”
Cyclone Ditwah reconstruction is also expected to drive demand for labour, analysts say.
At the moment top construction companies are looking to import labour and there are already foreign workers in the country.
“The top construction companies are asking permission to bring in foreign labour,” Bogahawatta said.
They are planning to bring around 7,500.
“There are already some who have come from India, Bangladesh and Nepal.”
“We do not plan to restrict them legally. But we are working to provide them with productive local trained workers in place of foreign workers.”
Dignity of Labour
Though there are unemployed youth in villages they are not always willing to work in the construction industry due to perceptions about construction jobs.
“There a large number of youth in villages waiting for jobs,” Bogahawatte said.
“On the other hand there are vacancies in the construction sector. There is a disconnect between these two.
“We are trying give these youth a chance to earn about 100,000 rupees and also a more professional standing. There is problem about self-image among skilled and unskilled staff.
“There is a requirement for about 10,000 workers. Based on our surveys the people are also there. They also need job security.
“So we have started a process to give necessary qualification like the NVQ and connect them with local construction companies, or even for foreign employment by making them trained craftsmen.”
Boom Bust
Sri Lanka has seen back-to-back currency and stabilization crisis from inflationary rate cuts made to boost inflation (flexible inflation targeting) or growth (potential output targeting).
Real estate and construction one of the first sectors that goes bust in a stabilization crises that come as rate cuts are reversed, with half completed high rises and unsold apartments.
When the currency collapses from rate cuts, houses are unaffordable at existing incomes as people struggle to make ends meet.
People then stop building new houses, or pause existing projections and construction workers usually go back to their home villages. After a sovereign default, government project were also halted.
Some workers have also gone abroad.
In the 2019 stabilization crisis, which followed money printed to cut rates in 2018 under so-called ‘flexible inflation targeting’, the construction sector contracted 14.8 percent, when overall economic growth fell from 4.3 to 2.9 percent.
Unlike in 2019 when the rupee collapsed from 152 to 184 to the US dollar, in 2022 the rupee collapsed from 200 to 360 to the US dollar due to a botched float of the currency with a surrender rule in place.
In 2023, the construction sector contracted 20.8 percent, on top of a 20 percent collapse in 2022, in the stabilization crisis that came in the wake of 2020 rate cuts.
In 2024 the sector expanded 19.4 percent as the overall economy expanded 5.0 percent with the central bank holding the exchange rate stable and construction costs kept down as the monetary authority missed its inflation target.
In the first nine months of 2025 the construction sector has expanded by another 10.5 percent.
(Colombo/Jan16/2026)