Cement sales fall as monsoon rains hamper construction activity

ISLAMABAD: Monsoon rains have significantly slowed down construction activity in Pakistan, leading to a 26 per cent drop in cement demand so far this year, compared to the same period in 2023.

In August 2024, cement dispatches stood at 3.37 million tonnes, marking a 26 per cent decline from August 2023. The drop is largely due to reduced construction activity, worsened by heavy monsoon rains, as reported by AKD Research.

Cement prices in northern Pakistan have also surged by Rs43 per bag in the past month, now averaging around Rs1,530 per bag. This price hike follows the Punjab government’s decision to increase royalty rates.

AKD Research predicts that local demand for cement will shrink by another 2 per cent to 2.5 per cent this fiscal year compared to the last. However, cement exports are expected to improve, keeping overall demand stable on an annual basis.

On a positive note, inflation in Pakistan has begun to ease. Headline inflation for August 2024 fell to 9.6 per cent year-on-year and 0.4 per cent month-on-month, the lowest in almost three years.

This drop aligns with predictions, as food prices remain stable, while certain core sectors saw slight increases. The housing and utilities sector, which accounts for 24 per cent of the inflation index, saw a 1.4 per cent month-on-month decline, largely due to lower electricity costs.

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