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Saudi Arabia consumes 50 million tonnes of cement in ten months

Modest growth in the short term forecasted for the construction sector

Saudi Arabia consumed 50.2 million tonnes of cement in the first ten months of the current year, up by eight per cent, a sign of increased construction activity in the Kingdom, according to a new report.

Cement dispatches for October 2015 reached 5.13m tonnes from 4.06m tons in October 2014, signalling a rise of 18.2 per cent month-on-month and 26.2 per cent year-on-year.

According to the report by Aljazira Capital, demand is forecasted to maintain a modest growth in the short term due to recovery in the local market after last year’s shortage of construction labourers.

Furthermore, the report indicates that the Saudi government will continue spending on key infrastructure ventures and keep the construction activity on track.

The construction sector is also expected to gain additional momentum as more efforts are on to build residential units to address the Kingdom’s deep-seated housing problem.

Meanwhile, profit margins are likely to go down mainly because of higher clinker inventory, which triggered heavy competition between producers for market share.