Manufacturing sector posts modest 4.1pc rebound in Q1

ISLAMABAD: The large-scale manufacturing (LSM) sector grew 4.08 per cent in the first quarter (July-September) of FY2026, marking a modest improvement driven by food, tobacco, garments, autos and electrical equipment, even as several key industries continued to struggle, official data showed on Wednesday.

The Pakistan Bureau of Statistics (PBS) said industrial output also rose 2.7 per cent year-on-year (YoY) in September 2025 and increased 2.05 per cent from August, reflecting a gradual pickup in activity. LSM accounts for 68 per cent of total manufacturing and contributes nearly 8.0 per cent to GDP, making it central to economic growth.

Despite the quarterly uptick, September’s data revealed sharp contractions in several sectors. Furniture output plunged 38.5 per cent, tobacco dropped 12.1 per cent, pharmaceuticals fell 10.8 per cent, fertilisers 4.1 per cent, chemicals 3.7 per cent, paper and board 2.3 per cent, and garments 2.2 per cent compared with the same month last year.

Autos, machinery and transport equipment helped lift the index, with automobile production surging 75.2 per cent on renewed demand and easing supply constraints. Machinery and equipment output jumped 50.7 per cent, and other transport equipment climbed 26.2 per cent.

Textiles rose 5.95 per cent, leather products 3.67 per cent and cotton yarn 2.0 per cent. Food rose 4.6 per cent, beverages 5.2 per cent, rubber products 13 per cent, and coke and petroleum products 6.96 per cent. Cement and other non-metallic minerals grew 9.34 per cent and 6.52 per cent, while fabricated metal output was up 11.3 per cent. Football production also increased 39 per cent.

Analysts still say and warn that the recovery remains fragile, citing high energy tariffs, costly raw materials, weak consumer spending and elevated interest rates. A sustained rebound, they say, will require policy support to reduce input costs and strengthen industrial competitiveness.