Large-scale manufacturing grows 7.33pc in May

ISLAMABAD: The large-scale manufacturing (LSM) sector expanded by 7.33 per cent in May 2024 compared to the same month last year, marking the sixth consecutive month of growth, according to official data released on Thursday.

The sector also saw a 7.5 per cent increase from the previous month. From July 2023 to May 2024, industrial output showed modest growth of 0.99 per cent, compared to the same period last year. The LSM sector, which accounts for 69.3 per cent of manufacturing and contributes 8.2 per cent to the GDP, is seen as crucial for potential impacts on GDP growth.Manufacturing activity in Pakistan began its recovery in FY24 but faced challenges such as weak market sentiments, global supply disruptions, and heavy reliance on imports, according to government data.

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

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 the provincial bureaus of statistics.

Several sectors reported increased production from July to May 2023-24 compared to the same period last year, including food, garments, coke and petroleum products, chemicals, fertilisers, pharmaceuticals, machinery and equipment, and furniture. Production decreased 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 FY2022-23, the LSM sector experienced consistent contraction starting in May 2022 and extending into the early months of FY23 in July.

In May 2024, 12 out of 25 sectors exhibited growth year-over-year. Chemicals output contracted by 2.86 per cent, including a 0.75 per cent decline in fertilizer output. Pharmaceuticalsoutput decreased by 2.3 per cent; sugar by 34.7 per cent; rubber products by 14.7 per cent; beverages by 0.35 per cent; iron and steel by 13.77 per cent; fabricated metal by 17.15 per cent; computer, electronics, and optical products by 0.85 per cent; and electrical equipment by 13.1 per cent.

Food output contracted by 0.91 per cent; machinery and equipment by 13 per cent; paper and board by 0.63 per cent; non-metallic minerals by 8.1 per cent; and cement output decreased by 2.77 per cent over the same month last year.

On the positive side, sectors such as garments increased by 40.67 per cent; automobiles by 43.85 per cent; leather products by 5.5 per cent; wood products by 11.1 per cent; and coke and petroleum products by 17.17 per cent.

Textiles output rose by 7.81 per cent; tobacco by 25.56 per cent; footballs by 16.3 per cent; cotton yarn by 5.9 per cent; cotton cloth by 0.95 per cent; and other transport equipment by 16.38 per cent over the same month last year.