Industrial output rises 2.04pc in March, slumps 9.35pc m/m

ISLAMABAD: The large-scale manufacturing sector grew 2.04 percent in March from a year earlier, marking the fourth consecutive monthly increase, while seeing a significant contraction of 9.35 percent from the previous month, official data showed Wednesday.

In the nine months from July to March of FY24, industrial output contracted by 0.10 percent compared to the same period last year, signaling a potential impact on GDP growth for this fiscal year as the sector contributes over one-fifth to the economy.

Notably, on a year-over-year basis, March’s growth marks the fourth consecutive monthly increase. The LSM sector grew by 3.03 percent in December 2023, by 1.12 percent in January 2024, by 1.19 percent in February, and by 2.04 percent in March. However, on a month-to-month basis, March marked the third consecutive month of contraction, with a 9.35 percent decline following a 0.66 percent decrease in January and a 3.08 percent decrease in February.

Various sectors saw production increases from July to March 2023-24, including food, garments, coke and petroleum products, chemicals, fertilizers, pharmaceuticals, machinery and equipment, and furniture. Conversely, there were declines in production in sectors such as tobacco, textiles, paper and board, non-metallic mineral products, iron and steel products, electrical equipment, automobiles, and other transport equipment during this period.

The Pakistan Bureau of Statistics (PBS) compiled these findings from data provided by multiple sources, including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and provincial Bureaus 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, starting in May 2022 and extending into the early months of FY23 in July.

In March 2024, fourteen out of twenty-five sectors exhibited positive growth, with notable declines observed in segments with significant weight in the LSM. Food output during March contracted by 5.8 percent, pharmaceuticals by 0.5 percent, furniture by 22.27 percent, beverages by 27.3 percent, non-metallic minerals by 3.48 percent, iron and steel products by 10.77 percent, computer, electronics, and optical products by 2.74 percent, electrical equipment by 3.27 percent, sugar by 13.4 percent, and cement production by 6.48 percent compared to the same month last year.

On the positive side, various sectors experienced growth: garments increased by 18.18 percent, automobiles by 3.38 percent, leather products by 7.37 percent, wood products by 12.7 percent, and chemicals by 7.95 percent, including a 25.35 percent rise in fertilizer output. Similarly, coke and petroleum products output increased by 12.8 percent, rubber products by 9.66 percent, machinery and equipment by 13.7 percent, footballs by 12.8 percent, cotton yarn by 3.5 percent, paper and board by 6.5 percent, and cotton cloth by 0.6 percent compared to the corresponding month of the previous year.