LSM posts 11.4pc growth in December

ISLAMABAD: Government on Friday cheered the momentous run of large scale manufacturing (LSM) sector consecutively for the six months in December, with industrial units in speed mode to meet a rebound in consumer demand.

LSM that makes 80 percent of industrial sector in Pakistan posted 8.16 percent growth in the first half of the current fiscal year and grew 11.4 percent year on year in December and 13.5 percent over November, according to the Pakistan Bureau of Statistics (PBS).

“Robust growth trends of large scale manufacturing have continued in December,” Hammad Azhar, minister for industries and production wrote on Twitter.

In July-December, all the three data collection authorities registered increase in production. Ministry of industries, measuring output trend of 36 items, recorded a 6.23 percent increase in production. Provincial bureau of statistics, counting production of 65 products, logged 1.63 percent growth. Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured growth of 0.29 percent year-on-year.

The government that struggles its way out of decades-worst economic slump is regaining confidence to boast of resilient recovery after coronavirus lockdown though it remained uncertain about policy direction. “The V-shaped economic recovery in Pakistan is led by industries,” Azhar said.

The government had been wavering to propound the importance of uninterrupted industrial wheel throughout the pandemic last year. However, the decision to reopen economy led to first V-shaped recovery in first half of the current fiscal year. This was also aided by surge in export orders from foreign countries.

“Industrial sector [is] now showing sustained strong growth,” Planning Minister Asad Umar said.

The government was expecting contraction in the current fiscal year when the coronavirus crisis rocked the economy that was trying to recover. LSM contracted 10.2 percent last fiscal year. Overall, the manufacturing sector shrank 2.6 percent in FY2020 as shutdowns and supply chain disruptions related to COVID-19 exacerbated other adverse factors affecting the sector since FY2019. Realising the potential of the construction industry, the government has given impetus to boost construction, according to the finance ministry. Efforts to boost construction sector have started to pay back as evidenced by the significant increase in cement dispatches.

Sales of cement and allied products and autos continued to increase driven by lower interest rate, which came down to 7 percent from 13 percent in couple of months. Soft interest rate is making the cost of borrowing at the lower side.

The production in July-December 2020-21 as compared to July-December 2019-20 increased in textile, food, beverages and tobacco, coke and petroleum products, pharmaceuticals, chemicals, non-metallic mineral products, automobiles, fertilisers and paper and paperboard while it decreased in electronics, leather products and engineering products, said the PBS.