KARACHI: Large scale manufacturing (LSM) growth contracted 3.64 percent during the last fiscal year of 2018/19 – the first annual contraction in a decade – as all the main industries saw sharp decline in production, official data showed on Monday.
LSM growth was in negative of 4.2 percent in 2008/09. The growth target was set at 8.1 percent for FY2019. The sector that accounts for 80 percent of aggregate industrial outputs grew 5.28 percent in the fiscal year of 2017/18, according to the Pakistan Bureau of Statistics (PBS).
Contraction in LSM growth reflected in fall in overall economic growth at 3.3 percent during the last fiscal year compared with a decade high of 5.5 percent in the preceding fiscal year. The real GDP growth is expected in the range of 3.5 to 4 percent in the current fiscal year.
In FY2019, production increased in fertilisers (0.38pc) and electronics (0.44pc), while it significantly decreased in food, beverages and tobacco (1.49pc), coke and petroleum products (0.53pc), pharmaceuticals (0.63pc), non-metallic mineral products (0.27pc), automobiles (0.89pc) and iron and steel products (0.5pc).
The LSM output decreased by 5.05 percent for June 2019 compared to the corresponding month a year earlier. It fell 8.5 percent in June if compared to the preceding month.
All the three data collection authorities registered decrease in production in FY2019 over the preceding fiscal year. Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured 8.35 percent year-over-year fall in outputs during the last fiscal year.
Ministry of industries, measuring output trend of 36 items, recorded a 4.22 percent decline in production. Provincial bureau of statistics, counting production of 65 products, logged 1.07 percent negative growth.
The PBS data showed that production of petroleum and lubricant products fell 8.35 percent year-over-year in the last fiscal year. Outputs of petroleum products declined 38.9 percent, followed by solvant naptha (26.9 pc), jute batching oil (14.48pc), furnace oil (11.9pc), high speed diesel (9.8pc), and jet fuel oil (9.5pc). Production of other petroleum products which, however, saw rise in production included liquefied petroleum gas (17.2pc), diesel oil (16.6pc), lubricating oil (9.7pc) and motor spirits (3.2pc).
The biggest decline was recorded in production of trucks by 34.3 percent, followed by tractors (30.5pc), billets / ingots (25.3pc), sugar (19.8pc), light commercial vehicles (15.8pc), motor cycles (12.9pc), sacking (11.6pc), jute goods (9.5pc), caustic soda (8.7pc), jeeps and cars (6.2pc), cement (2.9pc), and paper and board (2.5pc). Cigarettes, cotton yarn, cotton cloth, soda ash, nitrogen fertilisers, phosphate, glass plates and sheets and buses, however, recorded increase in production.
The PBS data further showed that provincial bureau of statistics registered negative growth in production of heavy machinery and equipment (75.5pc), followed by woolen cloth (56.7pc), switch gears (56pc), capsules (31.2pc), power looms (39.7pc), wheat thrashers (33.9pc), electric transformers (25.1pc) and diesel engines (21.5pc).