Impact of Macroeconomic Variables on the Performance of Cement Industry

Abstract

Investment has several benefits so this research is conducted to examine the factors which are effecting the decision for investment. It is important to stable those factors which are obstacles for the investment. The study aims to examine the impact of macroeconomic factors on performance of cement industry and its returns. Data were collected for monthly observations from 1st January 2010 to 31st December 2019.The study has selected a total of 20 cement companies based on the trading and availability throughout the study period in order to analyze the relationship between macroeconomic variables and cement industry returns. The macroeconomic variables include interest rate, inflation rate, and foreign exchange rate. There was a statistically significant impact of inflation on cement industry returns (p = 0.018). Moreover, a statistically significant impact of exchange rate was found on cement industry returns (p = 0.004). Lastly, interest rate was also statistically significant influencing on the cement industry returns (p = 0.028). It has been empirically and theoretically proven that trade-off between macroeconomic variables and cement industry returns may also be significantly positive in the long-run. Somehow, the results and findings of the current study also showed long-run association between macroeconomic variables and cement industry returns.