Ayesha Saba

The construction industry slowdown is a pressing issue with widespread implications, needing prompt and effective action for the revival and health of the allied industries.

Talking to WealthPK, financial officer at the Rawaha Estate and Builders Ammar Qureshi said, the construction sector had been under considerable strain due to several factors, including the rising material cost, regulatory hurdles, and reduced investment. This slowdown has equally affected the construction companies and the allied industries such as cement, steel, and manufacturing. The impact is far-reaching, affecting employment rates and economic growth. The price of a 50kg cement bag in the local market has increased by Rs130–140 following the approval of the tax-laden federal budget. The sector was hit with an excise levy of Rs100 per bag. Owing to these adjustments, a cement bag's price ranges between Rs1,400 and Rs1,450. The prices of steel bars have also skyrocketed following significant increases in the prices of gas, electricity, and petroleum products. Additionally, the power tariff has seen a steep rise, with the tariffs climbing substantially over the past year, leading to the soaring operational costs for the energy-intensive steel industry.

The price of steel bars has increased by Rs5,000 per ton from July 1, 2024. Consequently, the prices now range between Rs262,000 and Rs273,000 per ton. Ammar maintained that the increase in prices of petroleum products had further strained the industry by affecting transportation and other ancillary costs. As a result, the combined effect of these rising costs has pushed the industry to the brink of closure. He further stressed, "The construction industry's revival is essential for overall economic stability and growth. It is imperative to implement appropriate measures to address the current challenges and develop a more effective and well-designed fiscal policy that can benefit the industry given its significant contribution to the GDP and job creation across various levels." "To address these challenges and revive the construction activities, it is crucial for the industry stakeholders, government entities, and construction companies to collaborate on practical solutions," he underscored.

Credit: INP-WealthPk