Pakistan’s industry slows: LSM shrinks 1.87% in first half of FY25

ISLAMABAD: Pakistan’s large-scale manufacturing (LSM) sector contracted by 1.87 percent in the first half (July-December) of the current fiscal 2024-25 compared to the same period last year, as key industries reported lower output.

Production rose in tobacco, textiles, wearing apparel, automobiles and other transport equipment in the first half of fiscal year 2024-25 compared to the same period in 2023-24, while it declined in food, coke and petroleum, chemical products, non-metallic mineral, iron and steel products, electrical equipment, machinery and equipment, and furniture.

In December 2024, the LSM sector contracted by 3.73 percent compared to the same period last year, according to official data released Thursday.

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 is 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.

Despite this year-on-year contraction, the sector posted a month-on-month growth of 19.07 percent from November 2024. However, manufacturing activity continues to face significant challenges that are impeding broader sectoral growth.

While comparing the December 2024 performance with December 2023, several major industries faced a sharp decline. The iron and steel sector saw a contraction of 11.27pc, while food sector shrank by 6.07 percent. Other notable contractions included tobacco, down by 26.14 percent; electrical equipment, by 14.2 percent and fabricated metal, by 14.8 percent.

Production of footballs, one of Pakistan’s well-known export items, also dipped by 19.66 percent. The non-metallic mineral products sector saw a decline of 10.24 percent, sugar 12.5 percent, furniture output dropped by 70 percent, chemicals by 5.4 percent and wood products fell by 8.4 percent.

Despite the overall contraction, some sectors posted gains on a year-on-year basis. Beverages’ output surged by 17.38 percent, automobiles by 47.7 percent, textiles by 1.4 percent, leather products increased by 2.36 percent, pharmaceuticals 1.7 percent and paper and board by 3.96 per cent.

Other sectors that reported growth included coke and petroleum products, up by 9.1 percent. Rubber products recorded increase of 2.55 percent, and other transport equipment sector surged by 39.5 percent. Cotton yarn output rose by 8.65 percent, and cotton cloth production increased by 0.77 percent.