Indian producers feel pinch of November spending slowdown

Indian producers feel pinch of November spending slowdown
Published: 06 December 2011

The slowdown in infrastructure spending and two consecutive price hikes seem to have hampered cement demand recovery in November after a marginal recovery registered in October, reports The Hindu Business Line.

Dispatches of leading cement makers, such as ACC, UltraTech Cement and JP Associate fell seven per cent, three per cent and four per cent during November, compared with the preceding month. The lone exception was Ambuja Cement, which managed a three per cent growth, largely due to institutional sales and pick-up in demand in select regions where the company operates, said sources . However, in general, sales for November, year-on-year, were up more due to a lower base last year.

“The rising operational cost had forced many cement companies to hike prices twice in November which had resulted in demand tapering off after the first week of November. Though there is a pick-up in demand from real estate and bulk buyers, infrastructure activities still remain in doldrums,” said an analyst.

The recent rise in lending rates by banks may exert pressure on real estate, but the special offers put out by banks have attracted a few borrowers. However, uncertainty in the real estate sector will continue for some time, he added.