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
A 3d animation professional with over 20 years of industry experience having served in leading organizations & production facilities of Pakistan, an avid car enthusiast and petrolhead with an affection to deliver writings to help shape opinions. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com