Saturday July 20, 2024

Pakistan’s Large-Scale Manufacturing up 5.76pc in April but drops 8.14pc from March

By Israr Khan
June 15, 2024
Representational image of a LSM car manufacturing unit. — APP/File
Representational image of a LSM car manufacturing unit. — APP/File

ISLAMABAD: The Large-Scale Manufacturing (LSM) sector in Pakistan grew 5.76 percent in April compared to the same month last year, marking the fifth consecutive month of growth, according to official data released Friday. However, the sector saw a significant contraction of 8.14 percent from the previous month.

From July 2023 to April 2024, industrial output showed modest growth of 0.45 percent compared to the same period last year. This performance is crucial as the LSM sector accounts for 69.3 percent of manufacturing and contributes 8.2 percent to the GDP, indicating potential impacts on GDP growth for this fiscal year.

Manufacturing activity in Pakistan began its recovery in the fiscal year 2024, though it remained hampered by weak market sentiments, global supply disruptions, and a heavy reliance on imports, as highlighted by government data.

Challenges for the manufacturing sector included escalating input costs, a struggling textile sector, reduced government expenditure, high inflation, and elevated policy rates. Political and economic uncertainty ahead of the elections and subdued global demand further strained growth prospects.

Several sectors reported increased production from July to April 2023-24 compared to the same period last year, including food, garments, coke and petroleum products, chemicals, fertilizers, pharmaceuticals, machinery and equipment, and furniture. Conversely, production decreased in tobacco, textiles, paper and board, non-metallic mineral products, iron and steel products, electrical equipment, automobiles, and other transport equipment.

The Pakistan Bureau of Statistics (PBS) compiled these findings using data from multiple sources, including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and provincial Bureaus of Statistics.

Throughout the financial year 2022-23, the LSM sector experienced consistent contraction starting in May 2022 and extending into the early months of FY23 in July.On a year-over-year basis in April 2024, eleven out of twenty-five sectors exhibited positive growth. However, notable declines were observed in sectors with significant weight in the LSM.

In April, chemicals output contracted by 3.88 percent, including a 5.7 percent decline in fertilizer output. Pharmaceuticals output was down by 3.3 percent, sugar by 51.9 percent, rubber products by 15.6 percent, furniture by 3.6 percent, beverages by 11.57 percent, iron and steel by 7.95 percent, fabricated metal by 11.6 percent, computer, electronics, and optical products by 0.7 percent, and electrical equipment by 12 percent.

On the positive side, several sectors saw growth: garments increased by 17.6 percent, automobiles by 53.7 percent, leather products by 6.7 percent, wood products by 10.5 percent, and coke and petroleum products by 35.7 percent. Textiles output increased by 3.4 percent, tobacco by 63.4 percent, footballs by 57 percent, machinery and equipment by 13.56 percent, paper and board by 8.1 percent, non-metallic mineral products by 3.3 percent, cotton yarn by 3.7 percent, cement by 6.67 percent, cotton cloth by 0.93 percent, and other transport equipment by 27.7 percent over the same month last year.