ISLAMABAD: Pakistan’s cement industry is staging a cautious recovery, with dispatches rising by 10 percent during the first ten months of fiscal year 2026, driven largely by a revival in domestic demand after years of economic slowdown.

Industry data shows local dispatches climbed 12 percent year on year, offsetting a decline in exports that had previously supported the sector through a prolonged downturn. For the past three years, weak domestic consumption forced manufacturers to rely heavily on exports, which expanded their share in total sales from below 10 percent to nearly 20 percent.

Despite falling volumes in earlier years, cement producers managed to protect profitability through firm pricing strategies. Even in fiscal year 2023, when total offtake dropped sharply, the industry recorded higher pre tax earnings, highlighting its ability to pass on rising costs and maintain margins.

The current shift back toward the domestic market is a critical development, as local sales typically yield better margins. However, it also exposes the industry to the volatility of Pakistan’s internal economic conditions, where demand cycles are often fragile and inconsistent.

Analysts attribute the recent demand recovery to easing inflation, improved macroeconomic stability and the revival of stalled infrastructure projects. A new housing finance initiative offering long term loans is also expected to stimulate construction activity and support cement consumption in the coming months.

However, emerging risks threaten to slow momentum. Rising global oil prices linked to regional tensions are pushing up inflation and production costs, while nearly 40 percent of cement capacity remains idle. With demand still below peak levels and cost pressures intensifying, industry experts warn that the recovery may lose pace if economic stability weakens again.