The construction sector seems to be taking off well as the fiscal year comes to close, as indicated by the upsurge in local cement sales. Cement sales registered the highest number for the year so far, standing at 3.21 million tons against 3.12 million tons during the same period of last year.
On a year-on-year basis, this amounts to a 2.8 percent growth. While local sales have increased by 3.1 percent between March and April, export sales have registered a negative growth rate of 8.2 percent for the period.
The monthly data from APCMA show that domestic sales have picked up since February 2014 and have had a positive trend for the current year. On the other hand, exports have been following a negative trend. Similar trends in domestic and export sales were observed for FY13.
Aside from the weather impact, which usually begins to show positive signs for the industry around March every year and an increase in demand due to various housing projects, the industry has also had to benefit as the Islamabad-Rawalpindi Metro bus project took off this year. Private-sector led mega housing projects across a number of urban districts, along with government projects, are expected to keep demand for cement strong over the coming months.
The exports position remained weak largely due to declining demand from Afghanistan, the major cement export destination. Industry experts attribute this to the withdrawal of NATO troops from Afghanistan this year, which has stalled infrastructure-related projects in the country.
In this context, Pakistans trade position with India is revealing. India is the second-largest export destination for Pakistani cement. It is also noteworthy that exports to India have been relatively stable as compared to exports to Afghanistan. Moreover, there was a remarkable 150 percent month-on-month growth in exports to India in April 2014. It remains to be seen how effective track-I diplomatic parleys can be in normalising trade between the two nations, which may also help in giving a boost to the local cement industry.
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