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October 17, 2020

Big industry grows 1.2pc in August

Business

October 17, 2020

ISLAMABAD: Large scale manufacturing (LSM) sector posted 1.19 percent year-on-year growth in August as fertiliser and cement outputs started to rise on recovery in demand after lockdown, official data showed on Friday.

However, LSM fell 6.78 percent in August over July when the big industry posted growth for the first time in six months, according to the Pakistan Bureau of Statistics (PBS) as Covid-19 outbreak stirred latent potential of pharmaceutical and food industries despite shutdown setbacks to key industrial sectors.

In July-August, LSM increased 3.66 percent over the corresponding period a year earlier. Alone ministry of industries, measuring output trend of 36 items, recorded increase of 1.48 percent year-on-year in August, PBS data showed. Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, registered a contraction of 0.34 percent and provincial bureau of statistics, counting production of 65 products, logged very insignificant increase of 0.04 percent.

Cement production grew around 17 percent in August over the same month a year ago. Nitrogen and phosphate fertilisers production increased 2.5 and 11.2 percent, respectively. Billet and ingot outputs rose around 23 percent. Manufacturing of trucks, tractors and motorcycles was recorded upsurge too during the month.

July was the first month of growth after six months of depression aggravated by industrial and economic activity shutdown associated with the coronavirus. LSM which accounts for approximately 80 percent of manufacturing sector posted an increase of 10 percent year-on-year in December 2019.

LSM contracted 10.2 percent during the last fiscal year, second annual negative growth in a row since the government took charge, as demand remained suppressed on lack of policy reforms. LSM growth target for FY2020 was set at 3.1 percent. The output also moved in a reverse direction of the FY2019’s target with big industry having dipped 2.3 percent as opposed to the annual target of 8.1 percent. The decline was the first contraction in a decade.

Overall, the manufacturing sector contracted 2.6 percent in FY2020 as shutdowns and supply chain disruptions related to COVID-19 exacerbated other adverse factors affecting the sector since FY2019, said Asian Development Bank in a report.

The production in July-August 2020/21 as compared to the same period a year earlier increased in textile, food, beverages and tobacco, coke and petroleum products, pharmaceuticals, non-metallic mineral products and paper and paperboard, while it decreased in automobiles, iron and steel products, electronics and leather products.