LSM contracts by 10.63pc in March

KARACHI: Large scale manufacturing (LSM) sector posted a double digit decline in March over the corresponding period a year earlier as cement and auto sectors that used to drive growth decelerated year-on-year, official data showed on Wednesday.

The Pakistan Bureau of Statistics (PBS) said LSM output decreased by 10.63 percent for March 2019 compared to March 2018 and increased by 1.81 percent if compared to February 2019.

LSM that accounts for 80 percent of industrial sector would impact the overall economic growth that was forecast by the central bank to slow down to 3.5 to four percent in the current fiscal year of 2018/19 from a decade-high of 5.2 percent in the last fiscal year.

The overall output of LSM decreased by 2.93 percent for July-March 2018-19 compared to the corresponding period a year earlier.

The production in July-March 2018/19 as compared to Jul-Mar 2017/18 increased in fertilisers and electronics, while it decreased in food, beverages and tobacco, coke and petroleum products, pharmaceuticals, chemicals, non-metallic mineral products, automobiles and iron and steel products.

The LSM’s quantum indices are based on data from Oil Companies Advisory Committee (OCAC), ministry of industries and provincial bureau of statistics.

Ministry of industries which logs production statistics of 36 items recorded a 2.56 percent decline in the July-March period. The tally is much below the six percent target set for the current fiscal year. LSM grew 5.38 percent during the last fiscal year of 2017/18 as steel and cement production continued to increase.

The OCAC, which calculates production of 11 petroleum products, registered a 0.37 percent decrease in production. Provincial bureau of statistics, which measures outputs of 65 products across the country, registered a marginal 0.01 decrease in production.

In July-March period, petroleum production fell six percent year-on-year. Solvant naptha production fell 30.23 percent, followed by furnace oil (11pc), high speed diesel (7.58pc), kerosene oil (5.25pc) and jet fuel (4.87pc).

Sugar production declined 13.35 percent during the period under review to 4.898 million tons. Overall automobile sector showed downward trend in production except manufacturing of buses that increased 16.94 percent in the July-March period over the corresponding period a year earlier. Production of tractors declined 28.72 percent in the first nine months. Production of trucks fell 27.22 percent.

Light commercial vehicles recorded a 13.58 percent decline in production, while motorcycle production fell 11.66 percent during the period under review. The provincial bureau of statistics recorded decline in production of at least 30 items out of total 65 products.