Pakistan’s cement industry has started the new financial year with encouraging signs of improvement as domestic cement demand continues to strengthen. According to data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement dispatches increased by 8 percent during the first quarter of FY2026-27, while total cement dispatches including exports rose by 4 percent.
The latest figures suggest that construction activity in Pakistan is gradually recovering after facing several difficult years marked by high financing costs, expensive construction materials, weak demand and economic uncertainty.
During July to September 2026, domestic cement dispatches reached 10.845 million tonnes, compared with 10.062 million tonnes during the same period of the previous financial year. Total dispatches, including domestic sales and exports, reached 13.141 million tonnes, compared with 12.651 million tonnes a year earlier.
The improvement in domestic sales is particularly important because local construction activity is one of the major drivers of Pakistan’s cement industry.
Domestic Cement Demand Shows Improvement
Pakistan’s construction sector is closely connected with cement demand. Whenever housing projects, commercial buildings, roads, infrastructure schemes and private construction increase, cement consumption generally rises as well.
The latest APCMA figures show that domestic demand has become stronger during the opening quarter of FY2027.
Domestic cement dispatches increased by around 8 percent year-on-year during July-September, reaching 10.845 million tonnes. This compares with 10.062 million tonnes in the same period of FY2026.
The increase indicates that more cement is being consumed inside Pakistan, suggesting that construction activity is gaining momentum.
However, the recovery remains uneven. Export volumes declined during the same period, meaning that the overall industry growth was primarily supported by the domestic market.
September Records Strong Cement Sales
September was particularly encouraging for local cement manufacturers.
According to APCMA data, domestic cement dispatches reached 3.788 million tonnes in September 2026. This represented an increase of 7.35 percent compared with 3.529 million tonnes in September 2025.
Total cement dispatches, including exports, stood at 4.621 million tonnes in September, compared with 4.361 million tonnes during the same month of the previous year.
This represented growth of approximately 6 percent.
The figures show that September was stronger than August and provided a positive ending to the first quarter of FY2027.
Exports Remain a Challenge
Although domestic demand improved, Pakistan’s cement exporters continued to face difficulties.
Cement exports during July-September declined by 11.31 percent to 2.296 million tonnes from 2.589 million tonnes in the same period of the previous year.
The decline means that the industry’s overall performance could have been stronger if export markets had also improved.
In September alone, however, exports were almost unchanged. Export dispatches stood at 832,173 tonnes compared with 831,966 tonnes in September 2025.
This indicates that the major export weakness occurred during the earlier months of the financial year, while September showed some signs of stabilization.
Why Domestic Cement Sales Matter
The growth in domestic cement demand is important for the wider Pakistani economy because cement is connected to several other industries.
A stronger construction sector can increase demand for:
Steel
Bricks
Tiles
Paint
Glass
Electrical equipment
Plumbing materials
Transportation services
Construction machinery
Skilled and unskilled labour
As construction projects become more active, these related sectors can also benefit.
This makes cement dispatches an important indicator of economic activity.
The recent increase therefore provides a positive signal about Pakistan’s domestic construction market, although it does not mean that the industry has completely recovered from its previous challenges.
Cement Capacity Utilisation Improves
Another encouraging development is the improvement in cement industry capacity utilisation.
Topline Securities estimated that overall cement capacity utilisation reached approximately 51 percent in September 2026, compared with 50 percent in September 2025 and 47 percent in August 2026.
Capacity utilisation measures how much of the available production capacity manufacturers are actually using.
A higher utilisation rate generally indicates stronger demand.
The increase from 47 percent in August to 51 percent in September suggests that cement manufacturers were able to operate their plants at a higher level as local demand improved.
However, utilisation around 51 percent also means that a considerable amount of industry capacity remains unused.
Therefore, the sector still has room for further growth if construction activity continues to strengthen.
Cement Prices Increase
While cement sales have improved, consumers are also facing higher cement prices.
The average retail price of a cement bag increased by around 10 percent year-on-year in September 2026, reaching approximately Rs1,550 per bag compared with Rs1,408 during the same month of the previous year.
Higher fuel and transportation costs were identified as important factors behind the increase.
Cement production requires significant energy, while transporting cement from factories to markets also involves substantial fuel costs.
When energy and transportation expenses rise, manufacturers may face pressure to increase prices.
This creates a challenge for construction companies and ordinary consumers because higher cement prices can increase the overall cost of building homes and other structures.
Impact on Home Construction
For ordinary Pakistanis, cement prices are particularly important because construction costs can represent a major portion of household spending.
Families constructing homes must purchase cement along with steel, bricks, sand, electrical equipment, plumbing materials, tiles and other products.
If cement prices rise significantly, the total cost of construction can also increase.
At the same time, stronger cement sales indicate that construction activity remains active despite these higher costs.
This could suggest that some consumers and developers are continuing construction projects because of improving economic conditions or previously planned investments.
Recovery After a Difficult Period
Pakistan’s cement industry has experienced considerable pressure over recent years.
High interest rates increased borrowing costs for businesses and households. Higher construction costs reduced the affordability of new projects, while weak economic growth affected demand.
The industry also faced challenges in export markets.
The latest data, however, suggests that the domestic side of the industry is gradually improving.
Earlier figures from the first two months of FY2027 showed total cement dispatches rising by around 2.7 percent year-on-year, while domestic dispatches increased by about 8 percent.
The stronger third-month performance helped the industry finish the first quarter with 4 percent growth in total dispatches.
FY2026 Also Showed Stronger Domestic Demand
The improvement is not completely new.
Pakistan’s cement industry recorded stronger domestic sales during FY2026 as well.
According to APCMA data, domestic cement dispatches increased by 9.5 percent during FY2026, reaching 41.507 million tonnes compared with 37.906 million tonnes during FY2025.
Total cement dispatches increased by 7.21 percent to 50.515 million tonnes.
These figures show that the domestic cement market had already begun improving before the start of FY2027.
The continuation of this trend during the first quarter of the new financial year is therefore significant.
Cement Industry Profits Also Improved
Higher domestic volumes have also supported the financial performance of cement companies.
Listed cement companies recorded strong earnings during FY2026. According to data compiled by Topline Pakistan Research, the sector’s profits increased by 13 percent during the full financial year to around Rs143 billion.
Domestic cement dispatches increased by 10 percent during FY2026, while export dispatches declined by 2 percent.
The sector also benefited from lower finance costs.
This is important because cement companies often require significant capital for manufacturing plants, maintenance, transportation and other operations.
Lower borrowing costs can improve profitability and provide companies with more financial flexibility.
Construction Activity and Economic Growth
Construction is an important part of Pakistan’s economy because it creates demand across multiple sectors.
When construction activity increases, demand for building materials rises. Companies involved in transportation, engineering, manufacturing and construction services can also benefit.
The recent rise in cement dispatches therefore provides one indication that economic activity may be becoming broader.
Pakistan’s Economic Survey for FY2026-27 also highlighted stronger large-scale manufacturing, with LSM rebounding by 6.1 percent after several subdued years.
The improvement in manufacturing and cement demand could support wider economic recovery if the trend continues.
Government Spending Can Support Demand
Public-sector development projects can play an important role in cement consumption.
Roads, bridges, schools, hospitals, dams, housing schemes and other infrastructure projects require significant quantities of cement.
Government development spending can therefore create additional demand for local cement manufacturers.
At the same time, private-sector construction remains equally important.
Housing projects, commercial buildings, factories and individual home construction can all contribute to cement demand.
A combination of public and private construction activity would provide a stronger foundation for sustained industry growth.
The Importance of Interest Rates
Interest rates are another major factor affecting Pakistan’s construction industry.
When borrowing costs are high, developers may delay projects because financing becomes more expensive. Families may also postpone construction or reduce the size of planned projects.
When financial conditions improve, construction activity can become more attractive.
Cement industry analysts have previously linked the sector’s potential recovery to economic activity, lower interest rates and budgetary support for construction.
Therefore, monetary policy will remain an important factor for cement demand during FY2027.
Energy Costs Remain a Concern
Despite the improvement in cement dispatches, manufacturers continue to face challenges from energy prices.
Cement production is energy-intensive. Factories require substantial amounts of electricity and fuel to operate.
Any increase in energy costs can affect production expenses.
The APCMA has expressed concern about continued instability in energy prices and its effect on cement and allied industries.
Stable and competitive energy prices would therefore help manufacturers improve efficiency and remain competitive in domestic and international markets.
Transportation Costs Affect Cement Prices
Transportation is another major expense for cement manufacturers.
Pakistan is a large country, and cement often has to travel long distances from manufacturing plants to consumers.
Fuel prices therefore have a direct effect on distribution costs.
When diesel and other transportation expenses increase, the cost of delivering cement to construction sites can also rise.
This is one reason why higher fuel prices can eventually affect retail cement prices.
Regional Differences in the Cement Market
Pakistan’s cement industry has significant regional differences.
Northern and southern cement manufacturers operate in different market conditions and have different access to export destinations.
During August 2026, for example, northern mills experienced a significant decline in overall dispatches, while southern mills recorded strong growth.
This demonstrates that national figures can sometimes hide substantial differences between regions.
Export access, weather conditions, transportation costs and local construction demand can all influence regional performance.
Weather and Construction Activity
Weather conditions can also affect cement demand.
Heavy monsoon rains and flooding can temporarily slow construction activity because construction sites may become difficult to operate.
Pakistan experienced significant weather-related challenges in northern areas during the 2026 monsoon season.
The APCMA previously raised concerns that heavy rains and floods had affected agriculture and housing in northern regions.
As weather conditions improve, delayed construction projects may resume, potentially supporting cement demand.
Opportunities for the Cement Industry
The improving domestic market provides several opportunities for Pakistan’s cement manufacturers.
One major opportunity is the growing demand for housing.
Pakistan has a large population and continuing demand for residential construction. Urban expansion is also creating demand for apartments, commercial buildings and infrastructure.
If economic conditions remain stable, cement manufacturers could benefit from increasing construction activity.
Infrastructure development provides another major opportunity.
Large road, transportation, energy and public development projects can generate substantial cement demand.
Export Markets Need Attention
Despite improving domestic sales, the decline in exports remains an important concern.
Pakistan has cement manufacturing capacity that can serve both domestic and international markets.
Export growth could help manufacturers improve capacity utilisation and generate foreign exchange.
However, international competition, transportation costs, geopolitical developments and border conditions can affect Pakistan’s ability to expand cement exports.
The decline in exports during the first quarter of FY2027 therefore remains an issue that industry stakeholders will be watching closely.
What the Latest Figures Mean for Pakistan’s Economy
The latest cement numbers provide a cautiously positive picture.
Domestic dispatches are growing.
Capacity utilisation has improved.
The cement sector has previously recorded stronger profitability.
At the same time, exports remain weak and cement prices are higher.
This means that the industry is recovering, but the recovery is not yet complete.
The strongest positive signal is the continued growth in domestic demand.
Outlook for FY2027
The outlook for Pakistan’s cement industry during FY2027 will depend on several factors.
These include:
Domestic construction activity
Interest rates and financing conditions
Government development spending
Fuel and energy prices
Cement retail prices
Export demand
Weather conditions
Overall economic growth
Infrastructure development
Political and regional stability
If domestic construction continues to expand, cement dispatches could maintain their positive trend.
However, rising input costs and weak exports could limit the industry’s overall growth.
A Positive Signal, But Not a Full Recovery Yet
The latest cement figures should be viewed as an encouraging development rather than proof that all problems in the industry have disappeared.
Domestic sales increased strongly during the first quarter, but exports declined by more than 11 percent.
Capacity utilisation improved to 51 percent, but this still leaves considerable unused production capacity.
Cement prices increased by about 10 percent, creating additional pressure on consumers and construction companies.
Therefore, the sector’s recovery remains uneven.
The key question is whether domestic demand can continue growing throughout the rest of FY2027.
Conclusion
Pakistan’s cement industry has started FY2027 on a relatively positive note, with domestic cement dispatches increasing by 8 percent during the first quarter.
The rise to 10.845 million tonnes from 10.062 million tonnes a year earlier indicates that local construction activity is showing signs of improvement. Total cement dispatches also increased by 4 percent to 13.141 million tonnes.
September was particularly strong, with domestic dispatches rising 7.35 percent year-on-year and total dispatches increasing by around 6 percent.
However, the industry continues to face important challenges. Cement exports declined by 11.31 percent during the first quarter, while higher fuel and transportation costs pushed average retail cement prices higher.
Even with these difficulties, the latest figures provide a cautiously optimistic outlook for Pakistan’s construction and cement sectors.
If economic activity continues to strengthen, financing conditions remain supportive and infrastructure and housing projects expand, cement demand could continue rising during FY2027.
For now, the most important development is that domestic demand is improving. This could provide a stronger foundation for Pakistan’s cement manufacturers and contribute to wider economic activity in the months ahead.
FAQs
1. How much did Pakistan’s domestic cement dispatches increase in 1QFY27?
Domestic cement dispatches increased by 8 percent to 10.845 million tonnes during July-September 2026.
2. What happened to Pakistan’s cement exports?
Cement exports declined by 11.31 percent during the first quarter of FY2027 to 2.296 million tonnes.
3. How much did total cement dispatches increase?
Total cement dispatches, including domestic sales and exports, increased by 4 percent to 13.141 million tonnes during the first quarter.
4. Why are cement prices increasing in Pakistan?
Higher fuel and transportation costs are among the factors contributing to higher cement prices.
5. What is the outlook for Pakistan’s cement industry?
The outlook is cautiously positive because domestic demand and construction activity are improving, although weak exports, energy costs and higher cement prices remain important challenges.
