ISLAMABAD: The large-scale manufacturing (LSM) sector grew by 2.38 per cent in July 2024 compared to the same month last year, buoyed by gains in key industries including textiles, automobiles, food, beverages, garments and cotton yarn, official data showed Monday.
Despite the annual increase, the sector saw a contraction of 2.08 per cent from June 2024, reflecting mixed performance across industries. July marked the start of FY25 and signalled a modest recovery in manufacturing activity although the sector still faces challenges such as weak market sentiment, global supply chain disruptions and reliance on imports. The data indicated that these obstacles continue to hinder broader growth in the sector.
Industry analysts expect the LSM sector to improve in the coming months as borrowing costs ease due to declining inflation. On September 12, the State Bank of Pakistan cut its policy rate by 200 basis points (bps) to 17.5per cent, following earlier reductions of 150bps in June and 100bps in July. The rate had been at an all-time high of 22 per cent since June 2023.
The LSM sector, which accounts for 69.3 per cent of the country’s manufacturing and contributes 8.2 per cent to GDP, performed better than the previous year. In FY2023-24, the sector’s output increased by a modest 0.92 per cent.
The Pakistan Bureau of Statistics (PBS) compiled the July findings using data from sources including the Oil Companies Advisory Committee (OCAC), the Ministry of Industries and Production, and provincial bureaus of statistics.
Production increased in several industries compared to July 2023, including food, beverages, tobacco, textiles, wearing apparel, leather products, wood products, paper and board, coke and petroleum products, chemicals, automobiles, machinery and other manufacturing like footballs. However, declines were seen in pharmaceuticals, rubber products, non-metallic mineral products, iron and steel, fabricated metals, electrical equipment and furniture.
Food production rose by 4.8 per cent, automobiles by 71.96 per cent, leather products by 1.11 per cent, wood products by 8.6 per cent, and coke and petroleum products by 5.55 per cent over the same month last year. Textiles output saw an 8.43 per cent rise, with football production up 10.7 per cent, cotton yarn up 8.8 per cent, and cotton cloth up 1.01 per cent. Beverages production increased by 6.75 per cent, and output in computer, electronics, and optical products grew by 1.09 per cent. Paper and board production expanded by 6.35 per cent over July 2023.
Chemical production saw a slight 0.2 per cent increase, despite a 2.15 per cent decline in chemical products output, though fertilizer output rose 1.55 per cent. Tobacco production surged by 90.2 per cent.
On the downside, pharmaceutical output fell by 3.36 per cent, cement by 6.63 per cent, rubber products by 16 per cent, iron and steel by 18.4 per cent, furniture by 55.8 per cent, fabricated metal by 18.4 per cent, electrical equipment by 19.4 per cent, and machinery and equipment by 12.6 per cent over the same month last year.