ISLAMABAD According to data provided by the Pakistan Bureau of Statistics on Monday, the Large-Scale Manufacturing (LSM) sector shrank 0.64 percent in the first four months of the current fiscal year, despite a lower trajectory in interest rates.
In October, the LSM increased by 0.02 percent year over year. On the other hand, it decreased 2.24 percent month over month.
The LSM has decreased for three months in a row since August. The slump was caused by both domestic and international reasons. From December 2023 until May, the LSM had positive growth; however, in June, it entered negative territory.
In August, LSM fell 2.65 percent year over year, while in September, it fell 1.92 percent. But in October, the LSM recovered with a meager 0.02 percent gain. In July, the large industry’s output increased 2.38 percent.
The LSM sector shrank by 0.03 percent in FY24 after growing by 0.92 percent the year before.
In 4MFY24, the food group grew 2.22 percent year over year. Cooking oil, products connected to starch, and the milling of wheat and rice saw increases of 2.10 percent, 0.42 percent, and 4.37 percent, respectively. Because of better agricultural harvests, milling of wheat and rice rose significantly less over the time under consideration.
However, tea blend output fell 4.34 percent and vegetable ghee production fell 3.32 percent.
In 4MFY24, the textile industry expanded 2.60 percent year over year. Cotton textile production grew a meager 0.81 percent, but cotton yarn production rose 8.80 percent. A modest increase in export unit value in response to increased external demand for textiles was the main driver of the output growth.
Clothing exports increased 16.09 percent year over year. The main cause of the increase in clothing exports is the relocation of international buyers from Bangladesh to Pakistan.
However, since energy subsidies for export-oriented industries were eliminated, textile associations are complaining about increasing power prices, high loan rates, the phase-out of the Export Finance Scheme, and the high cost of imported raw materials—all of which have a significant influence on textile output.
In 4MFY24, coke and petroleum products saw a 1.33 percent increase. Jute batching oil jumped 67.33 percent, kerosene 30.06 percent, diesel oil 3.31 percent, and furnace oil 0.86 percent. On the other hand, LPG and gasoline fell 8.96% and 0.60%, respectively.
The output of automobiles and jeeps increased by 40.36 percent in 4MFY24, accounting for the majority of the 42.86 percent YoY growth in vehicle production. LCVs, trucks, and buses came in second and third, respectively, at 195.92, 89.49, and 32.80 percent. Nonetheless, there was an 8.87 percent decrease in diesel engine production.
The automotive sector has had numerous difficulties in recent years, including a drop in demand that has been made worse by elements like growing auto prices brought on by inflation and exchange rate swings. Additionally, banks’ unappealing auto finance alternatives discourage customers even more.
Fertilizer production increased by 3.82 percent, while pharmaceutical product production increased by 2.02 percent.
In 4MFY24, the production of iron and steel decreased by 12.42 percent. The consumption of billets and ingots, which are mostly used in the construction sector, decreased by 29.32 percent. H/C.R. sheets, strips, coils, and plates also shrank 2.91 percent.
Rubber product production fell 3.39 percent, non-metallic mineral production fell 15.05 percent, and electrical equipment production fell 21.38 percent.
