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LSM posts 4.81pc growth

Business

November 13, 2020

ISLAMABAD: Large scale manufacturing (LSM) sector posted 4.81 percent year-on-year growth during the first quarter of the current fiscal year of 2020/21 as cement industry showed double-digit increase and consumer demand rebounded after coronavirus lockdown, official data showed on Thursday.

Pakistan Bureau of Statistics (PBS) data showed that LSM output increased 7.7 percent year-on-year in September. LSM surged 10.1 percent compared to August.

The quarterly growth stemmed from 2.1 percent increase in textile production, 12.9 percent in food, beverage and tobacco, 2.8 percent in coke and petroleum products, 13.4 percent in pharmaceuticals, 9.8 percent in chemicals, 22.2 percent in non-metallic mineral products, 2 percent in fertiliser, 10.4 percent in paper and paper board and 8.2 percent in rubber products, according to the PBS.

Almost all the sectors recorded contraction or subdued performance in the corresponding quarter a year earlier, except chemicals, fertilisers and rubber products.

In July-September, cement sales and exports increased 21.9 percent to 13.6 million tons. Domestic sales registered a healthy increase of 18.8 percent, from 9.1 million tons to 10.8 million tons. Exports also grew 35.7 percent to 2.7 million tons.

Construction sector was boosted by incentives announced by the government to increase investment.

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 exacerbated other adverse factors affecting the sector since FY2019, said Asian Development Bank in a report.

In July-September, all the three data collection authorities registered increase in production.

Provincial bureau of statistics, counting production of 65 products, logged 5.7 percent growth. Ministry of industries, measuring output trend of 36 items, recorded a 4.6 percent increase in production. Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured growth of 2.8 percent year-on-year.