LSM posts four-year high growth of 5.6 percent in FY2017

KARACHI: Large scale manufacturing (LSM) sector posted a four-year high growth of 5.6 percent during the last fiscal year of 2016/17 as a massive development spending to fill infrastructure gap and a boom in construction piqued appetite of iron and steel products, official data showed on Friday.   

LSM, accounting for 80 percent of the industrial sector’s 10 percent contribution to GDP, recorded 3.13 percent growth in FY2016, 3.38 percent in FY2015, 5.39 percent in FY2014 and 4.28 percent in FY2013, revealed data from Pakistan Bureau of Statistics (PBS).

The LSM growth of FY2017 was a little shy of the annual target of 5.7 percent. The government also set the sector’s target at 5.7 percent for FY2018.

PBS data showed that iron and steel production recorded the highest growth of 20.48 percent during the last fiscal year, followed by electronics (17.02pc), food, beverages and tobacco (11.49pc), automobiles (11.22pc), pharmaceuticals (9.91pc), paper and paper board (7.18pc), non-metallic mineral products (4.44pc), engineering products (4pc), coke and petroleum products (2.79pc), fertilisers (1.66pc) and textile (0.81pc).

The government, in the budget for the current fiscal year, cut regulatory duty on aluminium waste scrap – a primary raw material for auto parts and fans manufacturing industries – to five percent from 10 percent in a bid to encourage industrial sector. 

Besides, government has been reducing corporate tax rate by one percent every year since 2013. The tax rate came down to 30 percent from 35 percent four years ago. Though businessmen still hold some reservations over the present tax regime, including delay in disbursement of refunds, the tax rate reduction has been a shot in the arm of trade and industry. 

In July-June, woods, leather products and chemical manufacturing sectors registered decline of 93.74, 17.02, and 2.11 percent, respectively. 

PBS said LSM output increased 3.33 percent for June compared with the same month a year earlier and decreased 6.51 percent if compared to May 2017. 

The bureau logs trend of industrial sector on the basis of statistics from Oil Companies Advisory Committee (OCAC), ministry of industries and provincial bureaus of statistics. OCAC monitors production trend of 11 oil, lubricant and petroleum products. Ministry of industries tracks outputs of 36 products, and provincial authorities measure production of 65 items nationwide.  

Provincial authorities registered the highest 4.09 percent year-on-year rise in output during the last fiscal year, followed by OCAC (3.32pc) and ministry of industries (2.98pc), showed PBS table. 

Provincial bureau of statistics recorded 41.65 percent growth in production of electric meters, followed by sewing machines (35.84pc), deep freezers (24.13pc), refrigerators (22.67pc), electric fans (23.45pc), and electric motors (21.25pc) in FY2017. 

Output of jute batching oil surged 47.65 percent to 2.596 million litres in the last fiscal year, followed by liquefied petroleum gas up 13.6 percent to 501.370 million litres, and motor spirits soaring 13.64 percent to 2.517 billion litres.

Auto industry manufactured 53,975 tractors during the last fiscal year, up 54.59 percent year-on-year. Sugar production surged 37.80 percent to 7.048 million tonnes, followed by manufacturing of trucks rising 36.11 percent to 7,712 units and production of billets and ingots increasing 28.77 percent to 4.099 million tonnes, according to PBS statistics.