LSM barely grows in February, faces steep monthly decline

ISLAMABAD: The Large-Scale Manufacturing (LSM) sector saw a fractional expansion of 0.06 percent in February 2024 compared to the same month last year, while experiencing a significant contraction of 4.14 percent from the previous month, official data showed on Tuesday.

The LSM sector, accounting for approximately a quarter of the country's GDP, experienced a marginal uptick of 0.06 percent in February 2024 compared to February 2023. This marked the third consecutive monthly increase, albeit at a sharply reduced rate. Its year-on-year growth stood at 3.02 percent in December 2023, reduced to 1.09 percent in January 2024, and plummeted to 0.06 percent in February 2024.

The Pakistan Bureau of Statistics (PBS) reported that during the July-February period of 2023-24, the sector contracted by 0.51 percent, contrasting with the same eight-month period in the previous year.

Various sectors witnessed a surge in production from July-February 2023-24, including food, garments, coke & petroleum products, chemicals, fertilizers, pharmaceuticals, machinery and equipment, and furniture. Conversely, there was a downturn in production within tobacco, textile, paper & board, non-metallic mineral products, iron & steel products, electrical equipment, automobiles, and other transport equipment during the mentioned timeframe.

The PBS compiled these findings from data provided by multiple sources, including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and the provincial Bureau of Statistics. Factors influencing industrial output include the central bank’s record-high policy rate of 22 percent since June 2023 and elevated energy costs.

Throughout the financial year 2022-23, the LSM sector experienced a consistent contraction, commencing in May 2022 and extending into the early months of FY23 in July.

In February 2024, fifteen out of twenty-five sectors exhibited positive growth, with notable declines observed primarily in segments with significant weightage in the LSM.

Textile output decreased by 4.7 percent, beverages by 9.9 percent, coke & petroleum products by 16.85 percent, tobacco by 31 percent, non-metallic minerals by 26.1 percent, iron & steel by 1.43 percent, fabricated metals by 22.9 percent, other transport equipment by 7.7 percent, cement by 27.6 percent, and computer, electronics, and optical products by 3.05 percent compared to a year ago.

On the positive side, various sectors experienced growth, with garments increasing by 18.74 percent, food by 0.77 percent, automobiles by 24.85 percent, leather products by 11.2 percent, wood products by 11.8 percent, and chemicals by 17.2 percent, including a 33 percent rise in fertilizers output. Similarly, pharmaceutical output increased by 10 percent, rubber products by 10.6 percent, machinery and equipment by 29 percent, footballs by 24.5 percent, cotton yarn by 3.4 percent, and sugar output increased by 1.37 percent compared to the corresponding month of the previous year.