دراسة الطلب على الإسمنت في المملكة العربية السعودية

Abstract EN

This study deals with the Saudi cement industry by focusing on the current and future production and domestic demand.

The study aims to investigate the impact of the relationship between Gross Domestic Product (GDP) and the demand for cement in Saudi Arabia, where it is well known, that GDP is an important factor to determine the demand for cement, in addition to, cement prices, loans, and population.

The methodology relied on using several approaches, where the model has been estimated by using the Ordinary Least Squares(OLS) method using the data for the period 1975 -2011 in the estimation process.

Since the variables form a time series, stationarity has been tested using time series Unit Root Tests.

In a next step an Error Correction Model (ECM) was estimated, which takes into account factors in both the short and the long runs in its form.

In the final step, a Cointegration Model was used, which gives the long-run relationship between the key variables that we have identified to be determinants of demand for cement in Saudi Arabia during the study period .

The results obtained showed that the variables of price and GDP retained their significance, being negative and positive respectively as expected.

Also according to results from the Cointegration model, the demand for cement had been marked by elastic price and income elasticities respectively in the long run; unlike what we got in the case of the ECM for the short run where they were characterized as inelastic.

Finally, demand for cement from the year 2012 – 2020 was estimated using the estimated model.

The study concluded the presence of a positive impact of GDP on the demand for cement as expected.

The possibility of this happening will be through the positive influence of GDP on the construction sector, which in turn will be reflected on the cement industry positively