LSM posts 4.21 percent growth in July-October

ISLAMABAD: Pakistan’s large scale manufacturing (LSM) sector posted a growth of 4.21 percent during the July-October period of the 2015/16 fiscal year over the same period of the previous year, official data showed on Friday.

The Pakistan Bureau of Statistics (PBS) said textile sector that has almost one-fifth weightage in the LSM index and contributes more than half in the country’s total exports grew only 0.3 percent in these four months. In October 2015, the sector’s output was up 0.55 percent over the same month last year.  

The LSM output increased 5.25 percent for October 2015 compared to October 2014 and also increased 0.99 percent if compared to September 2015.   

Analysts said the growth is still insufficient to create job opportunities at the satisfactory level.

  “If the government is able to reduce power supply-demand gap and tackle the security challenges, the LSM growth can be much higher,” said analyst. 

“Private sector is not in the aggressive mode to resort to banks for expansion and diversification funds, as public sector is crowding them out.” 

The PBS computes the quantum index numbers of LSM on the basis of latest production data of 112 items received from various sources, including the Oil Companies Advisory Committee (OCAC), Ministry of Industries and Production and provincial bureau of statistics.

The OCAC supplied the data of 11 items, registering 0.29 percent expansion in July-October 2015/16. The production ministry recorded data of 36 items, exhibiting a growth of 2.47 percent and provincial bureaus of statistics, providing data for 65 items, recording an expansion of 1.45 percent.

In July-October, fertiliser sector’s output rose 0.98 percent, automobiles 1.76 percent, food, beverages and tobacco 0.73 percent and pharmaceuticals production increased 0.61 percent over the same period a year earlier. 

The data further showed that coke and petroleum products grew 0.26 percent, chemicals 0.31 percent, non-metallic minerals products 0.47 percent and rubber products sector was up 0.06 percent during the four-month period.  

The PBS said wood production inched down 0.01 percent in July-Oct 2015/16, engineering sector 0.05 percent, paper and board 0.92 percent and leather products 0.03 percent, electronics 0.14 percent and iron and steel products output dipped 0.12 percent. 

LSM, contributing 10.6 percent to the national economy, has backward and forward linkage with other industries and services and transport sectors.

Pakistan’s manufacturing sector grew at an average rate of eight percent from the 60s to 80s, but fell to 3.9 percent during the 90s.

The plunge was mainly due to reduction in investment for lack of continuity and consistency in policies.