In July 2024, Pakistan’s Large-Scale Manufacturing (LSM) sector grew by 2.38 per cent compared to the same month last year, according to a report by the Pakistan Bureau of Statistics (PBS).
However, on a month-to-month basis, the sector saw a drop of 2.08 per cent from June’s index of 108.46 points.
Throughout FY24, the LSM sector showed a recovery of 0.92 per cent, boosted by growing confidence and improvements in various industries. Despite this, the growth rate still falls short of what’s needed for a stronger economic recovery.
The 2.38 per cent growth in July 2024 came largely from industries like Food (0.63 per cent), Tobacco (0.81 per cent), Textiles (1.48 per cent), Garments (1.37 per cent), and Automobiles (1.01 per cent).
On the other hand, some sectors, including Pharmaceuticals (-0.23 per cent), Cement (-0.38 per cent), Iron and Steel Products (-0.70 per cent), Electrical Equipment (-0.69 per cent), and Furniture (-1.36 per cent) saw declines.
Compared to July 2023, there was an increase in production for several industries, including Food, Beverages, Tobacco, Textiles, Leather Products, Petroleum Products, and Automobiles.
However, sectors such as Pharmaceuticals, Rubber Products, Iron and Steel, Electrical Equipment, and Furniture experienced declines in production.
The industrial sector contributes about 18 per cent to Pakistan’s total GDP, but data on industrial production is not frequently available.
To track industrial performance, policymakers look at Large Scale Manufacturing (LSM), which makes up a major part of the industrial sector. LSM accounts for around 69 per cent of manufacturing, which is a sub-sector of Industry, and about 8 per cent of Pakistan’s overall GDP.
While economic activity began to pick up in the latter half of FY24, challenges such as falling global demand, currency devaluation, and a growing current account deficit have restricted the government’s ability to maintain financial stability in tough economic conditions.
