Pakistan’s LSM sector contracts by 2.65pc in August

ISLAMABAD: Pakistan’s large-scale manufacturing (LSM) sector contracted by 2.65 percent in August 2024 compared to the same period last year, as key industries including textiles, automobiles, beverages, iron and steel, cement, and machinery reported lower output, according to official data released Thursday. Despite this year-on-year contraction, the sector posted a month-on-month growth of 4.68 percent from July 2024. However, manufacturing activity continues to face significant challenges that are impeding broader sectoral growth. During the first two months (July-August) of the current fiscal, the sector output went down by 0.19 percent over the same period of last fiscal.

The LSM sector is crucial to Pakistan’s economy, accounting for 69.3 percent of the country’s total manufacturing and contributing 8.2 percent to the gross domestic product (GDP). The data for July 2024 was compiled by the Pakistan Bureau of Statistics (PBS) from multiple sources, including the Oil Companies Advisory Committee (OCAC), Ministry of Industries and Production and provincial bureaus of statistics.

Compared to August 2023, several major industries faced a sharp decline. The textiles sector saw a contraction of 0.86 percent, while the automobile sector shrank by 9.08 percent. Other notable contractions included beverages, down by 2.89 percent; iron and steel, by 14.38 percent; electrical equipment, by 18.2 percent; and machinery and equipment, by 35.42 percent. Production of footballs, one of Pakistan’s well-known export items, also dipped by 4.13 percent. The non-metallic mineral products sector saw a significant decline of 26.55 percent, furniture output dropped by 52.32 percent and production of computer, electronics, and optical products fell by 3.2 percent.

Despite the overall contraction, a few sectors posted gains on a year-on-year basis. Garments output surged by 18.7 percent, while food manufacturing grew by 0.41 percent. The tobacco sector posted a 0.72 percent rise, leather products increased by 2.74 percent, and wood products saw modest growth of 1.41 percent.

Other sectors that reported growth included coke and petroleum products, up by 8.4 percent, chemicals by 0.36 percent, and fertilizers within the chemicals sector by 3.37 percent. Pharmaceuticals recorded a slight increase of 0.16 percent, rubber products grew by 1.82 percent, and other transport equipment sector surged by 26.26 percent. Cotton yarn output rose by 8.8 percent, and cotton cloth production increased by 0.74 percent.