Colombo Ranks Among Asia’s Lowest-Cost Construction Markets 📈

Sri Lanka’s construction sector has entered a stabilization phase, with Colombo maintaining a highly competitive cost position in the Asian region according to the 2025 CIOB Report. • Regional Competitiveness Colombo recorded the lowest construction costs in 5 out of 6 analyzed categories, including high-rise apartments, prestige offices, and hotels. It ranks as the 2nd lowest-cost city in Asia for aggregate construction costs per m². • Material Price Trends (YoY) Key inputs saw significant reductions, aiding overall stabilization: • Reinforcement Steel: -21% • Fuel: -10% • Concrete: -1% • Cement: +3% • Currency & Inflation Impact While costs rose only 13% in USD terms from 2020–2025, they surged 81% in LKR terms due to currency depreciation. In 2025, the LKR remained stable against the USD within a 1% margin. • Labour & Sector Growth • Labour costs rose 5% in 2025, driven by skilled migration and statutory wage hikes. • The construction sector grew 12.2% in Q3 2025, contributing Rs. 499.9 Bn in Gross Value Added. • Outlook Despite upward pressure on labour and financing, the real estate and infrastructure sectors retain a regional advantage. CIOB highlights the need for joint ventures and new technology to address capacity and capital issues. _Source: CIOB Construction Cost Report 2025 (Provisional)_