LSM shows 1.6% growth in November amidst mixed sector performance 

Despite modest growth, the large-scale manufacturing industry experienced an overall contraction of 0.80% in the first five months of the 2023-24 fiscal year

Pakistan’s Large-Scale Manufacturing (LSM) sector displayed a slight recovery in November, registering a growth of 1.59% compared to the same month last year, according to the latest data from the Pakistan Bureau of Statistics. This uptick follows a period of contraction in the previous month.

The sectors contributing to this growth include food, beverages, textiles, leather products, petroleum products, and chemicals. LSM had previously seen a positive shift in August 2023 after 14 months of decline, a trend that continued into September.

Factors such as the lifting of import restrictions, resolution of outstanding letters of credit, and increased dollar liquidity due to improved foreign exchange reserves of the State Bank of Pakistan (SBP) are believed to have aided this recovery.

Out of 22 LSM sectors, 12 showed positive growth in November. These include food (1.80%), beverages (19.09%), wearing apparel (27.79%), leather products (3.55%), wood products (31.82%), petroleum products (2.77%), fertilizers (21.37%), pharmaceuticals (23.62%), machinery and equipment (99.46%), and textiles (0.41%).

Despite this growth, LSM experienced an overall contraction of 0.80% in the first five months of the 2023-24 fiscal year. The textile and clothing sector saw mixed results, with decreases in yarn (2.80%) and cloth (3.89%) production, but a significant increase in the garment sector (27.79%).

The food group witnessed a decline in wheat and rice production by 2.76%, while cooking oil and vegetable ghee production rose by 25.31% and 0.19%, respectively. Petroleum products grew by 2.77%, attributed to increases in petrol (7.63%), high-speed diesel (5.19%), LPG (4.35%), and kerosene (44%) production.

Conversely, November saw a decline in iron and steel production (0.63%) and electrical equipment (7.84%). Fertilizers and pharmaceuticals, however, recorded significant growths of 21.37% and 23.62%, respectively.

The auto sector faced a substantial decline of 66.07% in November. The finance ministry attributed this to increased input costs and tightened auto finance, leading to reduced car production and sales (58.1% and 53.3%, respectively), and truck & bus production and sales (56.1% and 47.2%). Tractor production and sales, however, saw increases of 60.7% and 98.2%.

Petroleum product sales decreased by 16% to 6.45 million tonnes, down from 7.70 million tonnes in the same period last year. November oil sales were recorded at 1.37 million tonnes, an 11% decrease year-over-year.

Cement dispatches in November 2023 totaled 3.924 million tonnes, a 2.1% decrease from 4.009 million tonnes in the same month the previous year. However, total cement sales (domestic and exports) in July-November FY24 were 10.8% higher than the corresponding period last year, with domestic dispatches up by 2.04% and export dispatches increasing by 104.6%.

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