Large scale manufacturing posts 3.3 percent growth in FY15

ISLAMABAD: Pakistan’s large scale manufacturing (LSM) sector posted a growth of 3.3 percent during the last fiscal year of 2014/15 over the preceding year, official data showed on Wednesday.
The Pakistan Bureau of Statistics (PBS) said textile sector, which has a high value in LSM index, inched up 0.53 percent, while the fertiliser sector was up 1.1 percent.
Wood production plunged 74 percent in July-June FY15. Engineering sector dropped 18.28 percent, paper and board 9.86 percent and food and beverages and tobacco production fell 1.09 percent.
Economists said growth in general sales tax collection at domestic stage in FY15, which indicates industrial activities, has been almost one percent and if the inflation is adjusted it will turn negative.
Domestic demand is low owing to this and private sector’s borrowing from banks is also minimal as the sector is reluctant to make new investments in expanding their businesses.
Analysts said Pakistan’s economy is slowing down despite the government’s claims of controlling energy crisis, improving law and order situation and political stability.
LSM fell 3.98 percent in FY14 and 4.28 percent in FY13.
In June 2015, however, the manufacturing sector expanded 3.8 percent over the same month last year, while it shrank 3.8 percent over May 2015.
The International Monetary Fund is presenting good reviews of the country’s economy, Moody’s and other rating agencies are upgrading its ratings and international publications are carrying encouraging notes.
LSM, contributing 10.6 percent to the economy, has backward and forward linkage with other industries and services and transport sectors.
Pakistan’s manufacturing sector grew at an average rate of eight percent from the 60s to 80s, but fell to 3.9 percent during the 90s.
The plunge was mainly due to reduction in investment for lack of continuity and consistency in policies.
The PBS computes the quantum index numbers of LSM on the basis of latest production data of 112 items received from various sources, including the Oil Companies Advisory Committee, Ministry of Industries and Production and provincial bureau of statistics.
The OCAC supplied the data of 11 items, registering 0.37 percent expansion in July-June 2014/15.
The production ministry recorded data of 36 items, exhibiting a growth of 1.53 percent and provincial bureaus of statistics, providing data for 65 items, registered an expansion of 1.41 percent.
Production of iron and steel increased 35.4 percent, automobiles 23.56 percent, chemicals 8.4 percent, pharmaceuticals 7.5 percent, leather products 7.1 percent, electronics 5.6 percent, coke and petroleum products 0.78 percent and non-metallic mineral products production 2.13 percent during the period under review.