Cement’s dispatch numbers for October (roughly 4.36 million tons) are rosier than expected, up nearly 9 percent year on year, a major portion of which comes from exports. Local dispatches, however, did decline. Cumulatively too, FY25 in four months is still recording lower sales than last year, down 8 percent, regardless of the uptick in exports. Even so, a slow recovery may be on the horizon as 3M dispatches were down by much higher (14%). October may prove to be a turning point as it recorded higher sales compared to the average monthly sales in both 3MFY25 (3.4mn tons) and 3MFY24 (3.96mn tons). However, it is evident that exports are in the driver’s seat. Domestic demand has barely inched.

That is not to say there is no improvement. The macroeconomic environment is better, visible from dissipating inflation and the Central Bank’s confidence in slashing the policy rate down to 15 percent; delivering a substantive cut of 250bps. At its peak, the policy rate was trailing 22 percent which has since been declining. Despite that, it is clear that significant growth will take longer to materialize as the economic slowdown considerably shifted consumption patterns and delayed purchasing decisions for at least the past two years. This brings us to the construction industry, and by extension, construction material producers. Cement as a major component used in construction will only see a substantial surge in demand when both public and private sectors are ready to spend.

This means the slump in the real estate market will have to recover which—in the absence of a housing finance and mortgage market—depends greatly on individual property owners, builders and developers, and real estate investors and their spending appetites. Middle class and even higher income brackets are less likely to tie up their savings into projects without clear returns, or even delivery timelines. The momentum in the housing industry that was created during Imran Khan’s tenure has all but died (read: “Now you see it, now you don’t), and consumers as well as investors are waiting for the right time to step in. Though inflation is down, and even construction materials are no longer as inflationary as they were before, consumers are still reeling from the impact of increased cost of living which weighs heavy on big-ticket purchases.

The government, meanwhile, continues to spend heavily on infrastructure and development and approves new funding for existing long-term projects, many of which are still underway. However, fiscal constraints and cost overruns have led to delays. Financial limitations almost always affect project delivery leading to a scaled-back approach to massive investment-backed projects. Invariably, city dwellers may vouch for this: the various road, and transport infrastructure projects that were set to deliver a while ago are still scrambling to reach their finish line. All this to say, while October’s sales for cement dispatches is a positive development, much of which is fueled by exports, it is far from a recovery that hinges on a broader economic recovery for which perhaps the government itself is not ready.