Sri Lanka’s labour shortage is emerging as a constraint on export growth, with the National Chamber of Exporters (NCE) warning that difficulties in recruiting, training, and retaining workers are affecting businesses across the sector and require urgent policy intervention.
The Chamber said recent debate over recruiting foreign workers for the construction industry had highlighted a wider structural issue, noting that labour shortages now extend across multiple sectors of the economy, including export industries that generate much of the country’s foreign exchange
earnings.
According to the NCE, many of its nearly 700 member companies are struggling to fill vacancies across skill levels, raising concerns over the sector’s ability to expand exports and sustain growth.
The Chamber said the issue extends beyond labour availability to workforce participation, skills development, labour mobility, and the preparedness of Sri Lanka’s workforce to meet future industry requirements.
The NCE noted that 143,087 Sri Lankans had left for overseas employment so far in 2026, while the Sri Lanka Bureau of Foreign Employment (SLBFE) aims to facilitate 250,000 overseas placements this year. More than 1.07 million Sri Lankans are currently employed abroad, with the largest concentrations in the United Arab Emirates (UAE), Saudi Arabia, and Kuwait.
While acknowledging the economic importance of overseas employment, the Chamber said greater attention was needed to ensure sufficient labour remained available to support domestic industries.
Labour market data illustrate the challenge. The Labour Force Survey for the first quarter of 2026 showed a labour force participation rate of 49.2%, unemployment of 3.7%, and youth unemployment of 16.1% among those aged 15-24 years. Women also continued to record higher unemployment than men across all age groups.
However, the NCE said these figures did not reflect employers’ growing difficulty in sourcing workers with the technical and specialised skills required by export-oriented industries or retaining employees over longer periods.
The Chamber welcomed the Government’s move to formulate an inward labour migration policy, saying a structured framework for assessing skills, issuing work permits, and identifying occupations facing shortages would help businesses access overseas talent where local recruitment proved insufficient while protecting opportunities for Sri Lankan workers.
It stressed, however, that inward migration should complement rather than replace long-term investment in skills development, vocational training, and workforce planning.
The Chamber said closer collaboration between industry, educational institutions, and vocational training providers would be needed to develop specialised skills required by manufacturing and agricultural exporters, while improving employee retention would also be critical.
Warning that businesses operating with only a fraction of their required workforce faced growing operational risks, the NCE said prolonged labour shortages could undermine export expansion and ultimately force some enterprises to scale back operations if left unaddressed.