LSM in Negative: Pakistan Economic Survey 2023-24

LSM in Negative: Pakistan Economic Survey 2023-24 – The Pakistan Economic Survey 2023-24, released on Tuesday, revealed that Large-Scale Manufacturing (LSM) remained in negative territory at -0.1 percent during July-March FY 2024, marking an improvement from the -7.0 percent growth recorded in the corresponding period last year.

Despite the overall negative figure, 11 out of 22 LSM sectors witnessed growth. These sectors included Food, Wearing Apparel, Leather, Wood Products, Coke & Petroleum Products, Chemicals, Pharmaceuticals, Rubber Products, Machinery & Equipment, Furniture, and Other Manufacturing (e.g., footballs).

On a year-on-year (Y-o-Y) basis, LSM increased by 2.0 percent in March 2024, a significant recovery compared to the contraction of 26.4 percent in the same month last year. However, on a month-on-month (MoM) basis, LSM declined by 9.4 percent in March 2024, following a decrease of 3.1 percent in February 2024.

The Mining and Quarrying sector of the LSM showed positive performance, recording a growth of 4.9 percent during FY 2024, in stark contrast to a dip of 3.3 percent last year. During the July-March FY 2024 period, production of major minerals such as Coal, Chromite, Iron Ore, Soapstone, Magnesite, and Marble saw significant growth, with increases of 37.7, 36.9, 63.9, 29.3, 34.4, and 23.2 percent, respectively.

However, some minerals experienced negative growth. Natural Gas production declined by 2.0 percent, Dolomite by 2.1 percent, Sulphur by 20.3 percent, Barytes by 10.9 percent, and Ocher by 24.8 percent.

The mixed performance of the LSM sector highlights the challenges faced by Pakistan’s manufacturing industry amidst a volatile economic environment. The modest improvement from last year’s severe contraction indicates some sectors’ resilience, while others continue to struggle.

Analysts attribute the partial recovery in LSM to improved supply chain conditions, increased domestic demand in certain sectors, and government initiatives aimed at boosting industrial output. However, the ongoing economic instability, high inflation, and fluctuating energy prices remain significant hurdles.

Industry experts emphasize the need for strategic interventions to sustain and further the growth witnessed in specific LSM sectors. Enhanced policy measures, better infrastructure, and consistent energy supply are crucial to revitalizing the broader manufacturing landscape in Pakistan.

The Economic Survey 2023-24 thus presents a nuanced picture of Pakistan’s LSM sector, underlining areas of growth and resilience alongside persistent challenges. The government’s focus remains on bolstering industrial production to drive economic recovery and ensure sustainable development.