Post-conflict reconstruction and rehabilitation requirements in the North and East and the general economic revival are expected to trigger a construction sector boom over the next five years.
Listed cement manufacturers, cable companies and those making PVC pipes and tiles are expected to get more business and benefit from the building boom, NDB Stockbrokers said in a report on the construction industry.
"We expect the construction sector growth to surpass the expected growth in Goss Domestic Product of 7-8 percent over the next five years."
Over 700 billion rupees worth of construction-related projects are planned by the government during 2010-2012, according to the Ministry of Finance and Planning.
Infrastructure destroyed or neglected by battles are being repaired or upgraded and new facilities are being built.
"Although certain contracts may be awarded to foreign principles, a substantial part of the work would be re-assigned (by way of sub contracts) to local contractors," the brokers said.
"In addition to the large scale projects initiated by the state, we estimate construction projects worth a similar amount will be initiated by the private and informal sector."
The brokers said they expect the value of construction projects awarded to local contractors, including subcontracts, will increase annually by about 50-60 percent over the next three years.
"Certain companies that are listed in the Colombo Stock Exchange are expected to benefit and we expect exceptional growth in profits," the report further said.
The construction sub segment of the industry segment recorded an average growth of 7.5 percent over the last three years.
NDB Stockbrokers said future prospects in the building construction sector were improving with the housing construction sector expected to "rebound strongly" over the next five years.
The recovery of the northern and eastern regions is expected to generate "significant" construction and resettlement requirements, the report added.
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