Islamabad, April 16, 2024 – Official data released on Tuesday revealed that Pakistan’s Large-Scale Manufacturing (LSM) sector witnessed a slight expansion of 0.6 percent in February 2024 compared to the same period last year.
However, the sector experienced a notable contraction of 4.14 percent from the previous month, highlighting ongoing challenges within the industry.
The LSM sector, which contributes approximately a quarter of the country’s GDP, showed marginal growth in February 2024 compared to February 2023. This marks the third consecutive month of increase, albeit at a significantly reduced rate. Growth stood at 3.02 percent in December 2023, declined to 1.09 percent in January 2024, and further plummeted to 0.6 percent in February 2024.
Data compiled by the Pakistan Bureau of Statistics (PBS) indicates that during the July-February period of 2023-24, the sector contracted by 0.51 percent, contrasting with the same period in the previous year.
Several sectors experienced increased production from July-February 2023-24, including food, garments, coke & petroleum products, chemicals, fertilizers, pharmaceuticals, machinery and equipment, and furniture. Conversely, there was a downturn in production within sectors such as tobacco, textiles, paper & board, non-metallic mineral products, iron & steel products, electrical equipment, automobiles, and other transport equipment during the same timeframe.
The findings were compiled from data provided by various sources, including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and provincial Bureau of Statistics. Factors influencing industrial output include the central bank’s record-high policy rate of 22 percent since June 2023 and elevated energy costs.
Throughout the financial year 2022-23, the LSM sector experienced consistent contraction, beginning in May 2022 and extending into the early months of FY23 in July.
In February 2024, fifteen out of twenty-five sectors exhibited positive growth, with notable declines observed primarily in segments with significant weightage in the LSM. Textile output, for instance, decreased by 4.7 percent, while beverages saw a decline of 9.9 percent. Similarly, coke & petroleum products witnessed a decrease of 16.85 percent, and tobacco production declined by 31 percent compared to the previous year.
However, there were sectors that experienced growth, with garments increasing by 18.74 percent, automobiles by 24.85 percent, and chemicals by 17.2 percent. The production of fertilizers saw a significant rise of 33 percent, indicating positive momentum in certain segments of the LSM sector.
Despite challenges, the modest growth recorded in February 2024 suggests resilience within the LSM sector, with opportunities for further expansion and improvement in the coming months.
