KARACHI: Construction slowdown on account of political uncertainty, floods and costly building materials caused a 15.5 per cent and 21pc drop in cement sales during October and 4MFY23, respectively.

Export shipments also remained affected due to the economic slowdown in world markets.

Hassan Bakshi, former chairman Association of Builders and Developers (ABAD), said lingering political and economic uncertainty and massive increase in prices of construction materials were the main reasons behind falling cement sales in addition to rain and floods in July and August.

He said that despite the Rs30,000 per tonne dip in steel prices, the cost of construction had risen by at least 80pc in the last two and half years.

Due to rising prices of food items and utility bills, many people cannot pay monthly installments for the apartments which they have booked recently.

Mr Bakhshi anticipated further slowdown in construction activities fearing more political turmoil after the assassination attempt on former Prime Minister Imran Khan.

Data released by the All Pakistan Cement Manufacturers Association (APCMA) revealed an overall sales (local and exports) dropped 18.46pc to 4.252m tonnes in October as against 5.215m tonnes in the same month last year.

A cement maker said cement exports are under pressure due to the foreign exchange crisis in Sri Lanka and Bangladesh. He feared local cement sales may not pick up due to the political crisis and high construction costs.

Local cement despatches by the industry during October were 3.89m tonnes compared to 4.6m tonnes in October 2021, while exports fell by 41pc to 362,350 tonnes in October from 611,378 tonnes in October 2021.

In July-October, the overall cement despatches (domestic and exports) dipped by 23pc to 13.87m tonnes from 18.04mn tonnes in the first four months of last fiscal year.

Domestic despatches were 12.49m tonnes in 4MFY23 as against 15.88m tonnes in the corresponding period, down by 21.35pc. Exports were also 36pc less as the volumes reduced to 1.38m tonnes in 4MFY23 compared to 2.15m tonnes during the same period of last fiscal year.

According to the Sensitive Price Index (SPI) for the week ending Oct 27, the average price of a 50kg cement bag was Rs1,033 compared to Rs567 on Oct 29, 2020.

The daily average charges of painter, mason (Raj), labourer, plumber and electrician are now Rs1,369, Rs1,598, Rs981, Rs1,428 and Rs208 as compared to Rs1,182, Rs1,349, Rs810, Rs1,188 and Rs167 on Oct 29, 2020.

However, builders believe that labour charges also depend on the work quality and projects and are far higher than those quoted by the SPI data.

Expressing grave concerns over the continuous plunge in cement demand and the rising input costs, the APCMA spokesman urged the government to devise industry-friendly policies to make local cement competitive and help regain its momentum in international markets.

Published in Dawn, November 4th, 2022