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November 21, 2015

LSM growth clocks in at 3.88pct;business leaders cast doubt


November 21, 2015

KARACHI: Large scale manufacturing (LSM) grew 3.88 percent in the first quarter of the current fiscal year of 2015/16 with all the major sectors, including textile, food and petroleum recording growth in their outputs, official data said on Friday; although industrialists cast doubt on the numbers.
The Pakistan Bureau of Statistics (PBS) data showed that textile sector, which has the highest weight in the LSM basket, posted 0.78 percent rise in production in the July-September period of 2015/16 over the same period a year ago.
In September, the export-oriented textile industry recorded 1.05 percent increase in output.
Business leader SM Munir raised question over the veracity of the industrial production data.
“Textile firms are being closed…how come the output can scale up,” Munir said. “Around 120 textile mills have been shut.” Jawed Bilwani, chairman at Pakistan Apparel Forum put weight behind the argument.
“Had production increased exports would not have decreased,” Bilwani said.
Textile sector, which accounts for more than 50 percent of the exports revenue, has been witnessing continuous decline in its foreign earnings.
Textile exports dipped to $3.225 billion in July-September 2015 from $3.410 billion in July-September 2014.
The output increase might be a result of a surge in local consumption, but industrial analysts didn’t think so.
Bilwani said the easiest way to verify the authenticity of output data is to see “billing by SSGC (Sui Southern Gas Company) and SNGPL (Sui Northern Gas Pipelines Limited).”
“Our gas consumption is waning,” he said.
The PBS data showed that manufacturing of iron and steel, electronics, leather products, paper, engineering products and wood items slipped into the negative zone in the first three months of the current fiscal year.
The depressed leather industry underwent 1.02 percent drop in output in the July-September period of

2015/16 over the corresponding period a year ago.
Exports of leather manufactures slid $135.524 million in July-September 2015 from $158.440 million in July-September 2014.
Fawad Ijaz Khan, chairman at Pakistan Leather Garments Manufacturers and Exporters Association attributed the downward trend to the working capital paucity.
“We have no liquidity…our refunds are stuck,” Khan said over telephone from Islamabad.
He said the chairman Federal Board of Revenue assured the visiting delegation of leather manufacturers that he would address their issues.
“For the last one month, leather imports have been subject to 17 percent sales tax instead of three percent concessionary tax,” he said. “We are here (in Islamabad) to persuade the government to restore the tax discount on the leather imports.”
The PBS recorded the highest output growth in automobile sector (31.31 percent) in July-September 2015/16 over the same period last fiscal year, followed by fertilisers (15.10 percent), chemicals (12.77 percent), rubber products (8.27 percent), pharmaceuticals (6.82 percent), non-metallic mineral products (4.55 percent), coke and petroleum products (4.46 percent) and food, beverages and tobacco (3.40 percent).

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