Big industry output expands 5.76pc in April

Israr Khan
Saturday, Jun 15, 2024

ISLAMABAD: The large-scale manufacturing (LSM) sector in Pakistan grew 5.76 per cent in April compared to the same month last year, marking the fifth consecutive month of growth, according to official data released on Friday.

However, the sector saw a significant contraction of 8.14 per cent from the previous month. From July 2023 to April 2024, industrial output showed a modest growth of 0.45 per cent compared to the same period last year. This performance is crucial as the LSM sector accounts for 69.3 per cent of manufacturing and contributes 8.2 per cent to the GDP, indicating potential impacts on GDP growth for this fiscal year.

Manufacturing activity in Pakistan began its recovery in FY2024, though it remained hampered by weak market sentiments, global supply disruptions, and a heavy reliance on imports, as highlighted by the government data.

Challenges for the manufacturing sector included escalating input costs, a struggling textile sector, reduced government expenditure, high inflation, and elevated policy rates. Political and economic uncertainty ahead of the elections, along with subdued global demand, further strained growth prospects.

Several sectors reported increased production from July to April 2023-24 compared to the same period last year, including food, garments, coke and petroleum products, chemicals, fertilizers, pharmaceuticals, machinery and equipment, and furniture. Conversely, production decreased in tobacco, textiles, paper and board, non-metallic mineral products, iron and steel products, electrical equipment, automobiles, and other transport equipment.

The PBS compiled these findings using data from multiple sources, including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and the provincial Bureaus of Statistics.

Throughout the financial year 2022-23, the LSM sector experienced consistent contraction starting in May 2022 and extending into the early months of FY23 in July.

On a year-over-year basis in April 2024, 11 out of 25 sectors exhibited positive growth. However, notable declines were observed in sectors with significant weight in the LSM.

In April, chemicals output contracted by 3.88 per cent, including a 5.7 per cent decline in fertilizer output. Pharmaceuticals output was down by 3.3 per cent; sugar by 51.9 per cent; rubber products by 15.6 per cent; furniture by 3.6 per cent; beverages by 11.57 per cent; iron and steel by 7.95 per cent; fabricated metal by 11.6 per cent; computer, electronics, and optical products by 0.7 per cent; and electrical equipment by 12 per cent.

On the positive side, several sectors saw growth: garments increased by 17.6 per cent; automobiles by 53.7 per cent; leather products by 6.7 per cent; wood products by 10.5 per cent; and coke and petroleum products by 35.7 per cent. Textiles output increased by 3.4 per cent; tobacco by 63.4 per cent; footballs by 57 per cent; machinery and equipment by 13.56 per cent; paper and board by 8.1 per cent, non-metallic mineral products by 3.3 per cent, cotton yarn by 3.7 per cent, cement by 6.67 per cent, cotton cloth by 0.93 per cent, and other transport equipment by 27.7 per cent over the same month last year.