Pakistan’s Large-Scale Manufacturing (LSM) sector contracted 0.64% during the first four months (July-October) of the current fiscal year, according to data released by the Pakistan Bureau of Statistics (PBS).
In October, the LSM showed a slight year-on-year growth of 0.02% but recorded a month-on-month decline of 2.24%.
Since August, industrial output has shrunk for three consecutive months, reversing the growth seen from December 2023 to May.
On a year-on-year basis, the LSM dipped 2.65% in August and 1.92% in September before posting a marginal recovery of 0.02% in October. In July, the LSM grew 2.38%. For FY24, cumulative LSM output declined 0.03%, compared to a 0.92% growth in the previous fiscal year.
PBS data shows that the food group expanded by 2.22% during July-October, driven by a 4.37% rise in wheat and rice milling and a 2.10% increase in cooking oil production. However, vegetable ghee production dropped 3.32%, and tea blending declined 4.34%.
The textile sector, which accounts for a major portion of the LSM, grew 2.60% in 4MFY24. Cotton yarn output increased 8.80%, while cotton cloth saw a modest rise of 0.81%. Higher export demand contributed to this growth, with garment exports increasing by 16.09% year-on-year as foreign buyers diverted orders from Bangladesh to Pakistan.
However, textile associations reported challenges such as high power costs, the elimination of energy subsidies, expensive raw materials, and high loan rates.
Coke and petroleum products recorded a 1.33% increase, with notable growth in diesel oil (3.31%), kerosene (30.06%), and furnace oil (0.86%). However, petrol production declined by 0.60%, and LPG output fell by 8.96%.
The automobile sector grew 42.86% during the period, led by a 40.36% increase in the production of jeeps and cars, along with significant growth in LCVs (195.92%), trucks (89.49%), and buses (32.80%). Diesel engine production, however, declined by 8.87%. The automotive industry continues to face challenges, including reduced demand, rising car prices due to inflation, and limited auto financing options.
Pharmaceutical production grew by 2.02%, while fertiliser output increased by 3.82%.
The iron and steel sector reported a significant decline of 12.42%. Production of billets and ingots, primarily used in construction, dropped by 29.32%, while H/C.R. sheets, strips, coils, and plates shrank by 2.91%.
Non-metallic minerals saw a contraction of 15.05%, rubber products fell by 3.39%, and electrical equipment output dropped by 21.38%, reflecting continued struggles in key industrial segments.
