Pakistan’s large-scale manufacturing (LSM) output declined for 5th consecutive month, elevating fears of massive layoffs across the industrial sector.
The LSM index dipped by 7.06% in the second month of this fiscal year from a year ago, the Pakistan Bureau of Statistics (PBS) reported on Friday. In comparison, the index had contracted by the first month of current fiscal year, LSM index shrank by 3.28% while it fell 6.04% year-on-year between July and August. In 2018-19, the three LSM sectors recorded a decline of 3.64% against the target growth of 8.1%, which the government has set at 3.1% for 2019-20.
The decrease in LSM was mainly led by a dip of 14% in petroleum products, followed by 12.82% in automobile sector, 12.58% in non-metallic minerals, 9.96% in fertilizers, 9.81% in pharmaceuticals, 5.63% in chemicals, 5.43% in engineering, 5.10% in iron and steel and 0.08% in textile sector.
The lackluster performance in the industrial sector reflects the overall economic slowdown across various sectors in the ongoing fiscal year. LSM constitutes 80% of manufacturing and 10.7% of the overall GDP. In comparison, small-scale manufacturing accounts for just 1.8% of GDP and 13.7% in manufacturing.
As for automobile sector in particular, prices witnessed multiple upward revisions due to currency depreciations, which kept potential buyers at bay. On a yearly basis, the auto sector registered sales decline in almost all variants during the second month of this fiscal year. The production of tractor dipped by 36.3%, trucks 58.8%, buses 38.38%, passenger cars 41.71%, LCVs 10.76% and motor cycles 12.86%.
Sector wise, production data of 11 items under the Oil Companies Advisory Committee registered decrease of 0.66%, whereas 36 items under the Ministry of Industries and Production shrank by 4.89% and 65 items by Provincial Bureaus of Statistics by 1.5%.
Full story: Dawn