By Ayesha Saba

Pakistan’s cement sector recorded strong growth during FY2025-26, reflecting improving construction activity and rising industrial demand across the economy, according to the Ministry of Planning’s Monthly Development Update for May 2026.

The report said that cement dispatches increased 9.8 percent to 42.4 million tons during July-April FY2025-26 compared with the same period last year.

The increase signals a recovery in construction-linked sectors after prolonged economic slowdown and high financing costs in previous years.

According to the report, stronger industrial activity, public development spending and gradual improvement in macroeconomic conditions supported growth in construction demand during the fiscal year.

Pakistan’s industrial sector expanded 8.1 percent during the first half of FY2025-26, while large-scale manufacturing grew 6.5 percent during July-March FY2025-26.

The report noted that construction-related industries benefited from improving business confidence and rising investment activity.

Automobile production surged 61.6 percent during the review period, while output in petroleum products grew 10.9 percent, electrical equipment 11.9 percent and food products 9.8 percent.

The recovery in industrial production increased demand for infrastructure, logistics and commercial construction activity.

Private-sector credit also expanded during the fiscal year, supporting investment and construction financing.

Credit to private businesses increased 12.7 percent to Rs10.79 trillion by April 24, 2026. The report indicated that improving liquidity conditions and stronger banking-sector lending helped support industrial and construction activity.

Pakistan’s broader economic recovery also strengthened demand for cement and building materials.

GDP growth accelerated to 3.8 percent during the first half of FY2025-26 compared with 1.9 percent in the same period last year.

The report suggested that improving economic activity supported demand for both private and public-sector construction.

However, rising energy costs emerged as a major challenge for the cement industry during recent months.

Global oil prices surged sharply during March and April 2026 following escalating conflict in the Middle East, increasing fuel and transportation costs across industrial sectors.

The report noted that higher coal, electricity and transport costs could affect cement production margins and future pricing trends.

Headline inflation accelerated to 10.9 percent in April 2026 because of higher fuel prices and energy-related inflationary pressures.

The report also indicated that external-sector risks remain elevated because of Pakistan’s dependence on imported fuel and industrial inputs.

Imports of goods and services increased 8.3 percent to $56.3 billion during July-March FY2025-26.

Despite these pressures, the report stated that economic stabilization momentum remained broadly on track during the fiscal year.

The development outlook emphasized sustained fiscal discipline, stronger implementation capacity and stable macroeconomic conditions to maintain industrial and construction-sector recovery in the coming months.

Credit: INP-WealthPk