Annual Economic Survey highlights a massive industrial revival driven by large-scale manufacturing and the first mining expansion in four years.
ISLAMABAD: The Pakistan Economic Survey 2025–26 launched on Thursday has revealed that the national manufacturing sector recorded a robust 6.6 per cent growth rate over the outgoing fiscal year.
According to the official document, the industrial sector achieved this 6.6 per cent expansion primarily on the back of a stellar performance by the Large-Scale Manufacturing (LSM) sector during the 2026 fiscal year (FY26).
The Quantum Index of Manufacturing (QIM) recorded an aggregate growth of 6.5 per cent during the July–March FY26 period compared to the corresponding timeframe last year. Based on this QIM data, the overall growth of the LSM sector (adjusted for Financial Intermediation Services Indirectly Measured – FISIM) is officially estimated at 6.1 per cent for the full fiscal year.
Macroeconomic Stability Sparks Industrial Revival
Economic analysts note that this sharp industrial turnaround was heavily supported by a shift toward highly favourable macroeconomic conditions. Key factors driving the revival include:
• Stable Exchange Rate: Providing predictable cost structures for raw material imports.
• Contained Inflationary Pressures: Easing operational overheads for factories.
• Relative Monetary Easing: Allowing more affordable access to working capital through a softening central bank policy.
Out of 22 core industrial segments, a substantial 16 manufacturing sectors reported positive growth. This widespread expansion was led by critical sectors such as Food, Textiles, Wearing Apparel, Coke & Petroleum Products, Non-Metallic Mineral Products, Automobiles, Beverages, and Electrical Equipment.
Sharp Turnaround in Monthly Industrial Output
On a year-on-year (YoY) basis, the QIM witnessed a remarkable surge, growing by 11.1 per cent in March 2026. This presents an aggressive recovery compared to the 2.4 per cent contraction recorded in the exact same month of the previous year.
However, mirroring short-term seasonal market corrections, the index registered a month-on-month (MoM) decline of 5.2 per cent when compared directly with February 2026.
Key Industrial Growth Metrics at a Glance
| Industrial Sector / Index | FY26 Performance Metric | Growth Trajectory |
| Overall Manufacturing Sector | 6.6% Growth | Robust Expansion |
| Quantum Index of Manufacturing (QIM) | 6.5% Growth (July–March) | Strong Upward Trend |
| Large-Scale Manufacturing (LSM) | 6.1% Growth (FISIM Adjusted) | Multi-Sector Revival |
| Mining and Quarrying Sector | 0.4% Growth | First Expansion Since FY21 |
Mining and Quarrying Snaps Four-Year Contraction
In another significant development, the Mining and Quarrying sector recorded a marginal growth of 0.4 per cent in FY26. While modest, this marks the sector’s very first positive growth after enduring four consecutive years of harsh contraction, with the last recorded expansion dating back to FY21.
During the July–March FY26 period, the extraction of several minerals experienced an extraordinary boom. The highest growth was recorded in the extraction of magnesite, which skyrocketed by 164.8 per cent. This was followed by rock salt (up 109.9 per cent), gypsum (up 67.0 per cent), iron ore (up 41.5 per cent), ocher (up 31.7 per cent), limestone (up 25.1 per cent), and coal (up 6.5 per cent).
Conversely, certain segments within the extractive industry faced severe declines. The production of sulphur fell sharply by 68.0 per cent, followed by chromite (-51.3 per cent), soap stone (-24.7 per cent), and barytes (-20.7 per cent). Meanwhile, primary energy resources also faced minor dips, with natural gas production declining by 3.7 per cent and crude oil output shrinking marginally by 0.6 per cent.
