Big industry contracts 3.3 percent in July-January

ISLAMABAD: Large scale manufacturing (LSM) sector posted a negative growth of 3.37 percent in the first seven months of the current fiscal year of 2019/20 with downward trend expected to continue as coronavirus triggered partial lockdown in the country’s industrial hub.

Pakistan Bureau of Statistics (PBS) data on Wednesday showed that LSM output fell 5.96 percent year-on-year in January after posting a positive growth of 9.7 percent year-on-year in December for the first time in the last six months. On month-on-month basis, LSM rebounded 7.09 percent in January, the PBS said.

Fast spread of coronavirus is forcing social distancing in the country with the local government directing shutdown of shopping malls and other public gathering platforms in Karachi. While diversion of export orders from other countries inundated local industries with new works, their shipments are seen stuck or being cleared slowly at the western ports.

The central bank termed rebound in LSM sector in December as a consequence of strengthening industries, especially export-oriented ones. Textile exports rose 5.3 percent to $9.3 billion in the July-February period of the current fiscal year with value-added sector showing a recovery.

Performance of LSM, which accounts for 80 percent of the industrial output, would mirror economic growth that is likely to stay less than three percent in the current fiscal year. Considering slowdown in growth, LSM is expected to continue downward trend this fiscal year.

LSM has moved in reverse direction since the last fiscal year when it dipped 3.64 percent as opposed to the annual target of 8.1 percent. The decline was the first contraction in a decade.

All the three data collection authorities registered decrease in production in the first seven months of the current fiscal year. Ministry of industries, measuring output trend of 36 items, recorded a 2.06 percent decline in production.

Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured decline of 0.65 percent. Provincial bureau of statistics, counting production of 65 products, logged 0.65 percent negative growth.

The main industries that witnessed increase in output, during the July-January period, included textile (0.08pc), food, beverages and tobacco (0.35pc), non-metallic mineral products (0.20pc), fertilisers (0.26pc), leather products (0.15pc), paper and board (0.25pc), and rubber products (0.01pc).

The industries that recorded decrease in output included coke and petroleum products (0.65pc), pharmaceuticals (0.45pc), chemicals (0.07pc), automobiles (2.72pc), iron and steel products (0.40pc), electronics (0.35pc) and engineering products (0.01pc).