Industrial sector faces uneven growth; LSM barely rises in January

ISLAMABAD: Industrial sector showed a mixed performance in January 2024, with some sectors showing signs of robust growth while others lagged behind, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

Industrial output, however, expanded for the second consecutive month in January, rising by 1.84 percent compared to the same month a year earlier. Key sectors such as garments, automobiles, fertilizers, pharmaceuticals, and beverages reported increased output during the period.

However, several major sectors, including textiles, food, cement, sugar, petroleum products, and non-metallic minerals, recorded declines in output for the month under review. The large-scale manufacturing (LSM) sector, which contributes approximately a quarter to the country's GDP, saw only a marginal increase of 0.03 percent in January 2024 compared to December 2023.

Over the period from July 2023 to January 2024, the overall LSM sector experienced a contraction of -0.52 percent compared to the same period the previous year, PBS data showed. The State Bank's policy rate, which has remained at a record high of 22 percent since late June 2023, has had a significant impact on industrial activities, along with the high cost of energy.

Throughout the financial year 2022-23, the LSM sector witnessed a consistent contraction, beginning in May 2022 and extending into the early months of FY23 in July. The PBS compiled these findings using data from various sources including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and the provincial Bureau of Statistics.

In January 2024, thirteen out of twenty-five sectors showed positive growth, maintaining a trend observed over the previous seven months (July-January 2023/24). However, certain key sectors experienced declines in output compared to the same period the previous year.

Textiles output saw a notable decline of 6.9 percent, followed by declines in food by 3.87 percent, cement by 10.98 percent, sugar by 3.13 percent, beverages by 7.4 percent, petroleum products by 2.42 percent, furniture by 13.74 percent, tobacco by 58.35 percent, non-metallic minerals by 9.84 percent, paper & board by 0.56 percent, fabricated metal by 13.5 percent, computer, electronics and optical products by 4.42 percent, and other transport equipment output contracted by 10.4 percent over the corresponding month of the last year.

On the positive side, a dozen sectors experienced growth, with garments increasing by 66 percent, automobiles by 18.8 percent, leather products by 10.4 percent, wood products by 27 percent, and chemicals by 19.2 percent, including a 30.3 percent rise in fertilizers output. Similarly, pharmaceutical output increased by 16.6 percent, rubber products by 8.1 percent, machinery and equipment by 162 percent, footballs by 11.8 percent, and iron & steel by 1.04 percent compared to the corresponding month of the previous year. —