LSM shrinks 1.72 percentin July-February

ISLAMABAD: Large Scale Manufacturing (LSM) sector shrank 1.72 percent in the first eight months of the fiscal year 2018/19, though it showed a visible improvement by squeezing negative growth, Pakistan Bureau of Statistics (PBS) data showed.

Analysts said rupee devaluation slowed down trade deficit but it also had a negative impact on an already battered economic growth. Rupee’s devaluation against dollar has made the imports costlier and so the cost of doing business, they added.

Sectors which were mostly dependent on imported raw materials are hit hard by recent devaluation. Top performers were electronics that grew by one percent, fertilisers 0.25 percent and engineering products by 0.02 percent during first eight months of the current fiscal year.

However, textiles production reduced by 0.07 percent, food beverages and tobacco 0.31 percent, coke & petroleum products 0.34 percent, non-metallic minerals 0.44 percent, and pharmaceuticals production reduced by 0.73 percent. Besides, production of automobiles reduced by 0.47 percent, while iron and steel production too sent down by same 0.47 percent in July-February 2018/19 over same period of the last year.

In February 2019, the contraction was 1.49 percent over the same month last year. In the month of January, the LSM growth was negative 4.64 percent, while in December 2018, it was negative 10.19 percent.

Average LSM growth from July through February of FY19 was recorded at negative 1.72 percent over same period of the last year. Previously the seven-month average growth was minus 2.3 percent.

In July-February, all the data collection authorities, including Oil Companies Advisory Council (OCAC), ministry of industries, and provincial bureau of statistics registered decrease in production over the corresponding period a year earlier.

Ministry of industries, measuring output trend of 36 items, recorded a 1.63 percent fall in output during the first eight months.

The OCAC, logging outputs of 11 oil and petroleum products, measured a 0.34 decrease, while provincial bureau of statistics, counting output of 65 products, logged a positive 0.25 percent increase in growth during the period under review.

Sugar production fell 8.2 percent to 3.728 million tons in the July-February 2018/19, while in February 2019 it increased 11.85 percent over same month of last year. Cotton yarn production increased 0.02 percent to 2.287 million tons in these eight months.

Cement output was down 4.36 percent to 26 million tons, while it fell 15.39 year-on-year in February. Cars/jeeps production increased 1.28 percent to 156720 units during these eight months, while a 1.98 percent dip was seen in February.

Production of tractors fell 30.05 percent to 31879 units and in February it declined 35.27 percent. Besides, motorcycles’ production also went down 10 percent to 1.67 million units in eight months and in February it fell 14.80 percent over same month of last year.

Production of trucks slid 23.06 percent in July-February and dropped 39.69 percent in February. Busses trucks production during the period under review increased by 23.61 percent, but declined 50 percent in February.

In July-February period, furnace oil production was down 11.42 percent. High speed diesel output dropped 6.67 percent, kerosene 4.88 percent, while the LPG production increased 31.5 percent over corresponding period of last year.

Production of petrol increased 9 percent in eight months however in February it declined 10.8 percent. Diesel output rose 35.3 percent in eight months, and in February it went up 32.73 percent. Lubricating oil production increased 14.5 percent in this period and in February increased by 4.22 percent.

According to the data, during July-February, cooking oil, vegetable ghee, starch and its products, juices, syrups, woolen blankets, plywood, acids, synthetic fiber, cycle and motorcycle

tyres and tubes, sewing machines and electric motors production increased. —Israr Khan