Tuesday May 17, 2022

LSM grows 10.4pc in July-Mar FY22, highest since FY2006

May 14, 2022

ISLAMABAD: Pakistan’s large-scale manufacturing (LSM) production increased 10.4 percent in July-March 2021-22, the fastest three-quarter growth rate in 17 years, thanks to key manufacturing industries that gave promising outputs.

Broad-based expansion was seen during these nine months. Major manufacturing sectors, including textile, food, beverages and tobacco, automobile, chemicals, apparel, and iron and steel, gave a promising performance in output. Leather products and paper and paperboard also increased their outputs. However, pharmaceuticals, electrical equipment, and rubber products declined compared to over a year ago.

Interestingly, during these nearly two decades, LSM growth in FY2009, FY19, and FY20 went underwater, while other fiscals gave small growths.

LSM output grew to 26.6 percent in March 2022 over the corresponding month a year ago and an 8.2 percent expansion over the previous month, showing a healthy performance in almost all categories, the Pakistan Bureau of Statistics (PBS) reported on Friday. Figures are calculated while considering fiscal year 2015/16 as the base year.

Expansion in output could be attributed to rising global demand, easy credits, and to some extent, favourable short-term fiscal and monetary incentives, including construction and other support packages, and subsidised and uninterrupted energy supply to factories for speeding up economic recovery.

In Pakistan, the large industries occupy four-fifths of the country’s manufacturing sector, which contributes 12.79 percent to the gross domestic product (GDP) and employs 16.1 percent of the country’s labour force. The manufacturing industry consists of LSM, small-scale manufacturing, and slaughtering.

According to official documents of the Finance Ministry, LSM contributed 9.73 percent to GDP, small scale manufacturing (SSM) with 2.12 percent, and slaughtering contributed 0.94 percent in FY21.

The PBS has also reported LSM data based on 2005-06. According to this calculation, LSM growth arrives at 26.9 percent in March 2022 over the same month of last fiscal, and showed an increase of 8.5 percent over the previous month. Whereas, July-March 2021-22 average LSM growth recoded at 7 percent over the same period of the last fiscal.

According to the PBS data on base-year 2015/16, Oil Companies Advisory Council reports the logging outputs of 11 oil and petroleum products, measured growth of 2 percent in nine months. In March 2022, it was up 8.1 percent over the same month of last year and 12.7 percent over the previous month.

Ministry of industries, measuring the output of 36 items, recorded a 10.3 percent growth in production during the period. In March 2022, it grew by 34.4 percent over the corresponding month and 9 percent over February 2022.

The Provincial Bureau of statistics, counting the production of 65 products, recorded 12.1 percent growth in July-March 2021-22 over the corresponding period of FY21. In March 2022, its output increased 21 percent over the corresponding month and 6.6 percent over the previous month.

During July-March FY22, the food sector grew 11.7 percent, beverages 0.7 percent, tobacco 16.7 percent, textiles 3.2 percent, wearing apparel 34 percent, leather products 1.5 percent, wood products 157.5 percent, paper and board 8.5 percent, coke and petroleum products 2 percent, all chemicals 7.8 percent (in which chemical products output was up 15.2 percent and fertilisers 3.3 percent).

Besides, iron and steel products were up 16.5 percent, machinery and equipment 8.9 percent, automobiles 54.1 percent, furniture 302 percent, and other manufacturing (football) up 37.8 percent over the same period of last year.

However, the production of rubber products declined by 20.6 percent, fabricated metal by 7.2 percent, pharmaceuticals 0.4 percent, and electronics production went down 1.1 percent during the period.

On a year-on-year basis, in March 2022, food production grew by 85 percent, textiles 5.1 percent, wearing apparel 78.6 percent, wood products 32.6 percent, paper and board 11.6 percent, coke petroleum products 8.1 percent, chemicals 17 percent (of which chemical products output was up 17.1 percent, fertiliser up 16.9 percent), iron and steel products 11.2 percent, automobiles 25.8 percent, furniture 186.5 percent and other manufacturing (football) 64.1 percent, and pharmaceuticals output increased 12.6 percent.

Sectors that registered decline in output included beverages down 6 percent, tobacco 1.4 percent, leather products 7.6 percent, machinery and equipment 10.9 percent, and fabricated metals production down 6.1 percent over the same month of last year.