The Uganda Bureau of Statistics (Ubos) recently said that low domestic cement production in March and April this year had led to a slump in the construction industry.
Figures released by the official sector showed that the slump was due to capacity cuts by major cement producers. Currently, the largest cement producers in the country are Tororo Cement and Hima Cement. The construction sector shrank by 14.7% due to increased production costs, post-election uncertainty and the depreciation of the currency.
"We use cement consumption as a measure of growth or decline in the construction industry," said John Musoke, a leading statistician at Ubos. The decline in cement consumption means that the construction industry is shrinking.
"In April 2016, the net supply of domestic cement fell by 14.8% annually, mainly due to the reduction of production capacity.." In addition, the import of cement has been reduced. In short, economic construction began to slow down.
Industry experts predict that the devaluation of the currency will lead to a rise in the price of imported goods, and most of the raw materials for cement production need to be imported.
Prices are soaring
In February last year, Tororo Cement raised the price of 50 kg bags of cement from 28100 shillings to 29000 shillings. Currently, the retail price for 31500 ~ 33000 throughout Kampala has gone up. Steel, cement and labor are the main factors, accounting for 75% of the total construction cost.
Construction inputs of cement, steel, limestone and wood have been fluctuating upward in the past three months, according to dealers.
& emsp; & emsp; "Each retailer's pricing is based on the cost of their purchase.". For my part, I sell Hima cement and Tororo cement for 32000 and 33000 shillings respectively. "But some of them sell for a little more," said a dealer in Kamwokya.
Cement production in Kamwokya slumped 9.03% to 187.3 tonnes in April from 205.86 tonnes in March, Ubos figures showed. Imports of cement, on the other hand, fell from 38.39 tons in March to 22.12 tons in April.
Real estate developers believe that the input cost factors leading to the decline in cement production can not have a huge impact on the real estate industry. Nsubuga, domestic manager of Lamudi, an online real estate agency, said that the supply of cement could not directly affect the supply of real estate, and that the biggest impact of the shortage of cement was on major infrastructure projects.
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