ECONOMYNEXT – Sri Lanka’s cement availability has hit a 32-month high of 419,000 metric tonnes in August 2024, official data shows, indicative of a steady recovery in construction activities.
In August domestic production was 328,0000 metric tonnes, up 25.4 percent from a year earlier, central bank data showed.
Local production is highest since 365,000 metric tonnes were produced in December 2021.
Imports were 91,000 metric tonnes, down 3.7 percent.
Total cement availability at 419,000 metric tonnes was up 17.6 percent from a year ago.
During the last currency crisis when the central bank printed money through various liquidity tools and asked banks to give 7 percent housing loans, monthly cement imports topped 200,000 metric tonnes and total availability hit over 600,000 tonnes in some months.
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Construction and housing are one of bubbles that are fired when central banks cut rates with inflationary open market operations.
When rates are corrected and inflationary open market operations cease, the construction is hit and some real estate loans go bad. The longer the ‘easing cycle’ the bigger the bubble.
The US Fed fired its housing bubble with a credit cycle close to 8 years, compared to its usual 4 years or less which trigger less instability. (Colombo/Nov08/2024)