Low production of cement led to a decline in Ugandan construction market
The construction sector, usually seen as the pulse of economic activity, slowed down recently as cement prices shot up amid low production. Low production of cement between March and April 2016 has led to a slump in the construction sector, the Uganda Bureau of Statistics (Ubos) said recently.
The industry posted a 14.7% slump in growth as a result of the higher costs of inputs for production, uncertainty of the election aftermath, and the depreciating shilling. “We use cement consumption as a proxy for [determining] the growth or decline in the construction industry. A decline in cement consumption means there is a decline in growth,” John Musoke, a principal statistician at Ubos, said.
In February 2015, Tororo Cement revised their pricing from Shs 28,100 to Shs 29,000 for every 50-kg bag. Currently, retail prices across Kampala stand between Shs 31,500 and Shs 33,000. Steel, cement and labour are key components and constitute almost 75% of the overall construction cost.
The figures from Ubos show that cement production declined from 205.89 tonnes in March to 187.30 tonnes in April, representing a -9.03% change. On the other hand, imports of cement to the region also dropped to 22.12 tonnes from 38.39 tonnes between March and April.