Large-Scale Manufacturing Continue to Shrink

According to data issued by the Pakistan Bureau of Statistics, Large-Scale Manufacturing (LSM) witnessed a considerable year-over-year contraction of 14.37% in May. For the country’s major industries during the just-ended FY23, this is the 9th consecutive month of deterioration. The fundamental cause of this reduction is a slowdown in the manufacturing of export-oriented textile and apparel industries.

There have been a sizable number of job losses, which is clear evidence of the downturn’s effects on major industries. These figures demonstrate the difficulties the manufacturing sector in Pakistan is facing and cast doubt on the nation’s future economic growth.

LSM growth dipped in May 2023 compared to the same month last year. Going back, the April fall was 21%, the March decline was 25%, the February decline was 11.6%, and the January decline was 7.9%.

In December 2022, there was a 3.51% drop. In November 2022, there was a negative growth of 5.49%, while in October 2022, it declined by 7.7%. In September 2022, there was a decrease of 2.27% compared to the same month of last year. In August, there was a slight increase of 0.30% after a decline of 1.67% in July 2022, which was the first month of FY23.

In addition to a number of industries including garments & textile, steel & iron as well as food groups, the petroleum products also posted a negative growth of 21.85% in May, mainly because of a decline in the production of petrol and high-speed diesel while almost all other petroleum products recorded a slowdown. The auto sector also saw a 68.60% slump in May as the production of almost all kinds of vehicles went down.

LSM also had a 9.87% year-on-year decline between July and May. In contrast, the LSM in FY22, expanded by 11.7% year-on-year.

Source: Dawn