Pakistan's cement dispatches fall in July 2019

Pakistan's cement industry dispatches in July, the first month of the FY19-20, fell to 3.5Mt from 3.6Mt in July 2018. This translates to a decline of 2.8 per cent, primarily due to a slowdown in domestic demand as the economy contracts rapidly owing to policies targeting runaway budget deficit and the current account gap, says local media.

The industry's capacity utilisation also reportedly dropped to 70 per cent from the average levels of 85 per cent.

Industry observations show it is the continuation of a trend which entered the market in the last fiscal year because of the government policies targeting massive demand contraction. The downturn in cement sales is feared to be sharper in August and beyond, a manufacturer estimated. The cement sector is also concerned that domestic consumption is likely to decline further unless construction activity picks up.

The industry data for the last fiscal year, which is yet to be released by APCMA, showed local dispatches slumped 1.9 per cent to 40.3Mt from the preceding year. However, total industry sales rose by 2.1 per cent on the back of a 38 per cent surge in overseas shipments.