Cement production exceeds pre-pandemic levels as construction activities rebound

• July cement production up by 26% to 413, 000 MT compared to 327, 000 MT in July 2019 

Cement production had recovered to pre-pandemic levels as early as in July indicating that the construction sector had resumed activities at a faster pace after a pause during coronavirus related lockdowns. 

According to latest data, the local cement production in July rose by 26.3 percent to 413,000 MT compared to 327,000 MT in the same month in 2019. 

This brought the total domestic production of cement during the first seven months to 2,056,000 MT compared to 1,976,000 MT in the comparable period last year, recording an increase of 4.1 percent. 

The government commenced construction work on the first section of the Central Expressway and announced recently that it was planning to construct 100,000 kilometres of rural roads, connecting them to the main road network, which could provide a significant boost to the infrastructure construction and related sectors such as commercial and residential property development in the surrounding areas. 

Domestic cement production and imports recovered for the first time in June after the setback from coronavirus related lockdowns, but July marked the first time the aggregate production for the first eight months exceeding the year earlier period levels. 

After rising in June on a year-on-year basis, cement imports in July slightly declined to 422,000 MT from 430,000 metric tonnes in the same month a year ago, recording a decline of 1.7 percent, perhaps due to robust production of cement at home.

Total cement imports for the eight months from January through July was still down by 33.7 percent at 1,936,000 MT compared to 2,921,000 MT in the comparable period in 2019.

However, the cumulative cement use—local production and imports taken together—in July alone has risen by 10.4 percent to 835,000 MT from 756,000 MT in the same month last year.  
Despite the robust production of cement, the cumulative cement use in the first seven months of 2020 is still down by 18.5 percent at 3,992,000 MT compared to 4,897,000 MT during the same period last year. 

Due to renewed optimism from the successful pandemic control, the rapid restoration of the economy to the pre-pandemic levels, and the policy and political certainty after elections have boosted business and consumer confidence, adding a tailwind into the country’s construction sector.