Contribution of Cement Industry to Pakistan’s GDP: Key Economic Impact

The contribution of cement industry in Pakistan plays a significant role in the country’s economy, contributing directly to the GDP, generating employment, facilitating exports, and serving as a backbone for the construction sector. Here’s a fully updated overview of its economic impact in FY 2024–25 and beyond.

FY 2024–25 Highlights

Installed Capacity & Utilization

• As of June 2025, Pakistan’s cement industry reached an installed capacity of 84.58 million tons per annum (Mtpa).
• Capacity utilization fell to 53%, reflecting challenges in domestic demand recovery despite growing exports.
  

  Dispatches & Export Performance

  • Total dispatches stood at 33.99 million tons, down 1.5% year-on-year.
  • Domestic dispatches declined to 27.46 million tons (−6.6% YoY).
  • Exports surged to approximately 8 million tons in 11 months (July 2024–May 2025), marking a 29.7% YoY increase.
  • Export revenue crossed $287.9 million, easing the trade balance and supporting foreign exchange reserves.
    

    Profitability

    • The cement sector recorded Rs 34.7 billion in profits in Q2 FY25, reflecting a 55% YoY increase.
    • EBITDA margins improved to 31.6%, supported by lower coal prices and improved energy efficiency.
    • Total net sales for Q2 FY25 reached Rs 196.8 billion, with overall capacity utilization at 61%.

    Growth Outlook

    • AKD Securities forecasts 2.4% YoY growth in total dispatches for FY25, reaching around 45.3 million tons, driven by export momentum.
      

      Broader Economic Impact in 2025

      Direct Contribution to GDP

      • The cement industry continues to contribute approximately 0.85% of Pakistan’s GDP.
      • As part of large-scale manufacturing, it plays a key role in the sector’s total contribution of around 9–10% of GDP.

      Role in the Construction Sector

      • Cement supports the 2.5–3% of GDP that comes from the construction industry.
      • • It directly affects demand in steel, glass, tiles, and other related sectors.

        Fiscal & Trade Benefits

        • Export-led performance helped offset the slowdown in domestic demand, contributing to national revenue through duties and corporate taxation.
        • The industry remains crucial to Pakistan’s strategy of increasing exports and stabilizing macroeconomic indicators.
          

          Employment & Industrial Linkages

          • The sector supports over 150,000 direct and indirect jobs.
          • It drives a major chunk of allied industries and supply chains across transportation, mining, energy, and packaging.

          2025 Outlook & Strategic Priorities

          • Export Diversification: Expansion into Africa, the Middle East, and Central Asia continues.
          • Energy Efficiency: Transition to alternative fuels and green technologies is helping improve margins.
          • Domestic Demand Recovery: Reliant on public infrastructure spending, housing schemes, and macroeconomic stability.
          • Risks: High FED/duties, inflation, exchange rate volatility, and inconsistent government policies.
          • Conclusion
          • Despite low domestic consumption, Pakistan’s cement industry remained profitable and resilient in 2025 due to strong exports and cost optimization. With a consistent ~0.85% share in GDP and essential linkages to construction, trade, and industry, the sector continues to be a key pillar of Pakistan’s economy. Policy support, export incentives, and sustainable practices will be vital to ensure the sector’s long-term growth and contribution to GDP.
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