Total cement usage in the country fell 19% in the six months to June 2022, reflecting the decline in construction activities and the impact on the country’s economic output.
Construction contributes for a tenth of the country’s GDP, hence cement usage is a good proxy for economic activity (GDP).
In Q2 2022, Sri Lanka’s economy shrank 8.4%.
Construction has shrunk for three consecutive quarters, putting hundreds of thousands of workers out of work.
Total cement usage dropped by 47.9% in June to 302,000 metric tonnes from the same month last year due to significant fuel constraints.
Total cement usage has declined 19% to 2,855,000 metric tonnes through June.
Cement imports fell 84% to 35,000 metric tonnes in June from a year ago, bringing the first six months imports to 1,010,000 metric tonnes, down 26.2%.
Steep decrease in the currency also drove up cement prices, halting building across the country.
As builders’ funding dried up, rising interest rates also slowed building.
The government has delayed practically all major infrastructure projects, pushing several builders into acute liquidity issues as unpaid payments total Rs.130 billion.
Builders owe banks an estimated Rs.200 billion.
Domestic cement production declined 26.5% to 268,000 metric tonnes in June and 14.5% to 1,845,000 metric tonnes in the past six months.