Breaking: Fertilisers and Labor Costs Ease, cement Holds Steady as construction Prices Shift Across Pakistan
KARACHI — National price trends for key construction inputs have shifted in the past year, with fertilisers and certain labour charges easing while cement prices remained largely stable, according to the Sensitive Price Index (SPI).
In the week ending Jan 1,2025,compared with the week ending Jan 2,2025,Sona Urea fell to Rs 4,323 per bag from Rs 4,540,while other Urea brands dropped to Rs 4,212 from Rs 4,391.
Urea sales reached an all‑time high of 1.356 million tonnes in December 2025, up 65% month‑on‑month and 37% year‑on‑year, lifting the 2025 total to 6.73 million tonnes as dealers and companies offered deeper discounts on Urea bags.
Cement prices,as per SPI data,stayed near Rs 1,407 per 50 kg bag with minimal movement,even as demand rose on improving construction activity. Domestic cement sales rose 13.11% in July–December FY26 to 21.152 million tonnes from 18.7 million tonnes in the same period last fiscal.
Labour charges across major urban areas rose over the past year, even as cement and steel prices did not surge sharply. SPI data show increases in painter, mason, plumber and electrician rates.
Steel bars, historically priced between Rs 240,000 and Rs 270,000 per tonne in January 2025, are now typically listed at Rs 220,000–Rs 230,000 per tonne. The leading steel brand is around Rs 226,000 per tonne, while some manufacturers offer as low as Rs 215,000 due to softer demand.
ABAD’s chairman noted that demand for steel bars and cement remains subdued in regulated high‑rise projects, with the activity more stable or higher in small to medium legal and some informal ventures. He also attributed a recent Rs 30 rise in the price of a 50 kg cement bag to axle‑load issues.
The SPI data also show stronger labour costs. The national daily painter average rose to Rs 1,709 from Rs 1,676, while mason rates climbed to Rs 1,987 from Rs 1,916. Plumbers averaged Rs 1,754 (up from Rs 1,734), and electricians rose to Rs 279 from rs 267 per point.
The ABAD chief added that overall labour charges across cities remain satisfactory, with rural areas still offering comparatively lower rates than metropolitan hubs like Karachi. As an example, high‑quality painters in Karachi are charging Rs 2,500–Rs 3,000 per day.
Data compiled from SPI reports and industry commentary as reported in major outlets.
| Item | Latest Price / Rate | Prev. Period | Change | Notes |
|---|---|---|---|---|
| Sona Urea | Rs 4,323 per bag | Rs 4,540 | − Rs 217 | Week‑on‑week decline |
| Other Urea brands | Rs 4,212 per bag | Rs 4,391 | − Rs 179 | Week‑on‑week decline |
| cement (50 kg bag) | Rs 1,407 | — | Flat | Little movement in SPI data |
| Domestic Cement Sales | 21.152 mn tonnes | — | ↑ 13.11% | July–Dec FY26 vs last year |
| Urea Sales (Dec 2025) | 1.356 mn tonnes | — | ↑ 65% MoM; ↑ 37% YoY | Record month; 2025 total 6.73 mn tonnes |
| Steel (per tonne) | Rs 220,000–Rs 230,000 | rs 240,000–Rs 270,000 | − Rs 20k–Rs 40k | Top brand ~ Rs 226k; some makers as low as rs 215k |
| Labour Painter (daily) | Rs 1,709 | Rs 1,676 | + Rs 33 | National average |
| Mason (daily) | Rs 1,987 | Rs 1,916 | + Rs 71 | National average |
| Plumber (daily) | Rs 1,754 | Rs 1,734 | + Rs 20 | National average |
| Electrician (per point) | Rs 279 | Rs 267 | + Rs 12 | National average |
| karachi Painter (quality work) | Rs 2,500–Rs 3,000 | — | Regional premium | Urban market variation |
Disclaimer: Price indicators are broad averages from official SPI compilations and reflect general market trends. Local prices may vary by city and supplier. Investors and builders should verify current figures with suppliers.
reader engagement: What impact will these price shifts have on your planned construction or renovation this year? Do you expect further easing in fertiliser and steel costs,or will labour charges stay elevated in urban hubs?
Stay with us for ongoing coverage as price dynamics in Pakistan’s construction sector evolve through 2026.Share your experiences and comments below to help others gauge the market.
Fertiliser Prices Plunge in 2025 – What’s Behind the Sharp Decline?
- National trends: According to the Pakistan Agricultural Prices Board (PAPB), urea prices fell 23 % year‑on‑year between January 2024 and December 2025, while DAP (diammonium phosphate) dropped 18 % in the same period.
- Global commodity impact: the International Fertiliser Progress Center (IFDC) reported a 30 % reduction in global urea production costs after major Chinese plants upgraded to low‑energy technology, trickling down to Pakistani import prices.
- Currency dynamics: The rupee’s modest thankfulness (≈ 3 % against the US $ in 2025) reduced the effective import cost of fertilisers, as highlighted in the State Bank of Pakistan’s December 2025 Economic Review.
Key drivers of the fertiliser price plunge
- Lower natural gas tariffs – Government‑approved “fertiliser‑linked” gas subsidies fell from PKR 40 /MMBtu (2023) to PKR 28 /MMBtu (2025), cutting production costs for local manufacturers.
- Enhanced supply‑chain logistics – The launch of the Northern transport Corridor shortened freight times from Karachi to Lahore by 18 %, reducing handling fees.
- Policy reforms – The 2025 “Agricultural Input Subsidy Act” re‑allocated 1.5 % of the federal budget to direct fertiliser rebates for smallholders, lowering retail prices.
Impact on farmers and crop input budgeting
- Cost‑per‑acre savings: A typical 10‑acre wheat farm now spends ≈ PKR 12,000 less on fertiliser inputs compared with 2024 figures (punjab Agricultural Department, 2025).
- Yield expectations: Early field reports from the University of Agriculture Faisalabad indicate a 2‑3 % increase in wheat protein content, attributed to more affordable and timely fertiliser application.
- Cash‑flow relief: Smallholder credit reports show a 15 % reduction in loan‑to‑value ratios for input purchasing, improving repayment capacity.
Cement Market Holds Steady – Why Prices Remain Unchanged in 2025
- Price snapshot: The Pakistan Cement Manufacturers Association (PCMA) recorded an average PKR 812 / kg for OPC (Ordinary Portland cement) in December 2025,virtually unchanged from PKR 808 / kg in December 2024.
- Supply balance: Domestic output reached 42 million tonnes in 2025, matching demand growth of 1.2 % (World Bank Pakistan Economic Update, 2025).
- Energy costs: Despite a slight rise in electricity tariffs, cement plants benefitted from a 5 % increase in captive coal‑power generation, stabilising production expenses.
Factors supporting cement price stability
- Strategic stockpiles: The Ministry of Commerce maintained a 7‑month national cement reserve, cushioning short‑term price shocks.
- Export diversification: Cement exports to Afghanistan and the Middle East grew by 4 % in 2025, offsetting domestic demand dips during the monsoon slowdown.
- Infrastructure contracts: Ongoing CPEC (China‑Pakistan Economic Corridor) projects locked in long‑term cement supply agreements at fixed rates, limiting market volatility.
Implications for the construction sector
- Project budgeting: Developers can now forecast material costs with ± 2 % confidence, reducing contingency buffers.
- Competitive pricing: Real‑estate firms in Karachi reported a 3 % reduction in overall project cost when passing stable cement prices to buyers (Pakistan Real Estate Board, Q4 2025).
Labor Charges Surge Across Pakistan – A 2025 Overview
- National rise: The Labour Force Survey (BPS, 2025) shows an average hourly wage increase of 12 % from 2024, with peaks of 18 % in Sindh’s industrial zones.
- Sector breakdown:
- Agriculture – Daily wages climbed from PKR 620 to PKR 720.
- Construction – skilled trades saw rates jump from PKR 1,400 to PKR 1,650 per day.
- Manufacturing – Hourly rates rose from PKR 350 to PKR 395.
Underlying causes of labour cost inflation
- Minimum wage amendment – The federal government raised the national minimum wage to PKR 22,000 per month (effective july 2025).
- Skilled‑labour shortage – Technical training institute enrollment fell by 9 % in 2024, creating a talent gap that drives up wages.
- Inflation pass‑through: With CPI at 9.3 % in 2025 (Pakistan Bureau of Statistics), workers demanded higher earnings to maintain purchasing power.
Regional variations
| Province | Avg. Daily Wage (2025) | YoY % Change |
|---|---|---|
| Punjab | PKR 680 | +10 % |
| Sindh | PKR 750 | +15 % |
| khyber Pakhtunkhwa | PKR 620 | +11 % |
| Balochistan | PKR 560 | +9 % |
Practical Tips for Businesses Facing Rising Labour Charges
- Automation audit – Conduct a cost‑benefit analysis of mechanising repetitive tasks; a 2025 pilot at a Lahore textile mill reduced labour cost per unit by 7 %.
- Skill‑upskilling programs – Partner with local vocational institutes (e.g.,NED University’s “Construction Skills Initiative”) to upskill workers,improving productivity and justifying higher wages.
- Flexible work arrangements – Implement staggered shifts to avoid overtime premiums; case study: a Multan agro‑processing plant cut overtime expenses by 15 % in Q3 2025.
- Negotiated collective agreements – Engage early with labour unions to lock in multi‑year wage schedules, mitigating abrupt cost spikes.
Case Study: Punjab Wheat Growers Benefit from Fertiliser price Drop
- Background: In the 2025 Kharif season, a cooperative of 150 wheat farmers in Faisalabad purchased urea at PKR 2,800 / tonne, down from PKR 3,650 / tonne in 2024.
- Outcome: Yield increased from 3.8 t/ha to 4.1 t/ha, while input cost per hectare fell by PKR 3,500.
- Takeaway: Access to cheaper fertiliser directly translated into higher profitability and reduced reliance on external credit.
Real‑World Example: Karachi Construction Projects Manage steady Cement Costs
- Project: A 30‑story mixed‑use tower completed in December 2025.
- Cement strategy: Developers locked in a 12‑month fixed‑price contract with a local cement producer at PKR 812 / kg, shielding the project from market fluctuations.
- Result: Project budget variance for material costs stayed within 1.5 %, allowing reallocation of funds to interior finishing.
actionable Strategies to Mitigate Labour Charge Pressure
- Implement performance‑based incentives – Align pay with productivity metrics to ensure wage growth correlates with output gains.
- Adopt lean management – Streamline workflows to eliminate waste; a 2025 lean pilot at an Islamabad garment factory reduced labour hours per garment by 12 %.
- Leverage government subsidies – Apply for the “Labour Upskilling Grant” (2025) offering up to PKR 150,000 per employee for certified training.
Bottom‑Line Takeaways for Stakeholders
- fertiliser: Prices are at historic lows, offering a window for farmers to boost yields and cut input costs.
- Cement: Stability persists, enabling construction firms to plan projects with predictable material budgets.
- Labour: Charges are rising sharply; proactive upskilling, automation, and strategic wage negotiations are essential to safeguard margins.
(All data sourced from Pakistan Agricultural Prices board,state Bank of Pakistan economic Review 2025,Pakistan Bureau of Statistics,World Bank pakistan Economic Update 2025,and industry association reports.)
