Construction in Sri Lanka - A Case Study

This chapter examines the development of the construction industry of Sri Lanka from the 1970s, drawing attention to many problems that might also exist in other Developing Countries (DCs). Construction development in Sri Lanka, as in many DCs, depends mainly on the national plan of each political group in power. Construction gained the status of a leading sector in development in the post-1997 period. The construction sector&s;s expansion in the early 1980s was marked by an insufficient supply of domestic building materials, a restrained role for domestic contractors and other bottlenecks. The ability to direct investments into construction on a long-term basis in order to achieve specified social goals depends inter alia on, firstly, the level of national saving, and secondly, the proportion of it that is institutionalised. In the DCs, value added in construction typically varies from 3%-7% of Gross Domestic Product, but new construction output accounts for 45%-65% of gross domestic capital formation.