Soaring Input Costs and Rupee Depreciation Add Pressure to Pakistan’s Building Industry
Key Takeaways:
i) Cement manufacturers in Pakistan have increased prices by PKR 20-25 per bag, citing rising production costs.
ii) The primary drivers for this price hike include the appreciation of the US dollar against the Pakistani Rupee and increased fuel expenses.
iii) Industry analysts express concern over the potential impact on the construction sector, particularly ongoing and future development projects.
Islamabad, Pakistan – April 16, 2025 – In a recent analysis published by Business Recorder titled “Cement prices further up” and authored by Hafeez Pasha, concerns were raised regarding the escalating cost of cement in Pakistan. In the article, available at [Insert URL Here], the author states, “[Cement manufacturers have further increased the price of cement by Rs20-25 per bag across the country with effect from today (Tuesday) due to the increase in production cost]”.
According to Hafeez Pasha’s report in Business Recorder, the cement industry attributes this latest price increase to the continuous strengthening of the US dollar, which makes imported raw materials more expensive, and the upward trend in fuel prices, a significant component of their operational expenses. “[The manufacturers said that the cost of production has increased due to the appreciation of the US dollar and increase in fuel prices],” according to Hafeez Pasha.
Industry stakeholders are worried about the repercussions of these escalating cement prices on the construction sector. This sector plays a crucial role in Pakistan’s economic growth, contributing significantly to employment and overall development. Higher cement costs could lead to increased project budgets, potentially causing delays or even cancellations of construction activities, both in the public and private sectors.
“[This increase in cement prices will further squeeze the profit margins of contractors and developers and may lead to a slowdown in construction activities],” Hafeez Pasha quotes industry analysts as saying.
Background research indicates that Pakistan’s economy has been facing numerous challenges, including currency depreciation and inflationary pressures. The construction sector, already navigating these broader economic headwinds, now faces the additional burden of rising input costs.
“[This increase in cement prices will further squeeze the profit margins of contractors and developers and may lead to a slowdown in construction activities],” Hafeez Pasha quotes industry analysts as saying. They emphasize that affordable building materials are essential for sustaining growth in the housing and infrastructure sectors.
The continuous rise in cement prices presents a significant challenge for the Pakistani construction industry, potentially dampening its growth prospects and impacting the overall economy. Stakeholders are closely monitoring the situation and hoping for measures to stabilize input costs and support the vital construction sector.
