ISLAMABAD: Large-scale manufacturing (LSM) grew by 3.92 per cent in the first 10 months of the outgoing fiscal year from a year ago period reflecting a partial revival in the industrial output.

On a year-on-year basis, the LSM grew by 3.15pc in April 2016 over the corresponding month of last year, showed data released by the Pakistan Bureau of Statistics on Friday.

Industry-specific data shows that automobiles recorded highest growth of 20.39pc, fertilisers 15.47pc, non-metallic mineral products 10.39pc, chemicals 9.42pc, rubber products 8.13pc, leather products 7.66pc, pharmaceuticals 6.29pc, food, beverages and tobacco 1.83pc, coke and petroleum products 0.10pc and textile 0.56pc.

The other sectors that showed decline included wood products 60.1pc, engineering products 13.98pc, iron and steel products 8.94pc, electronics 3.45pc, and paper and board 1.75pc.

The Ministry of Finance in its latest report listed several factors contributing to growth in the LSM in the last few months. The growth is achieved despite delayed growth coming from sugar and closure of Pakistan Steel Mills since July 2015 when Sui Southern Gas Company suspended gas supply to the mills due to non-payment of bills. The sugar industry started giving positive growth results in March 2016 after witnessing a negative growth in February.

The decline in global commodity prices benefited many industries, such as food, automobile, cement and chemical and construction activities, Punjab government’s Apna Rozgar Scheme and improved availability of gas supplies to fertiliser and cement sectors.

The Overseas Investors Chamber of Commerce and Industry in its latest business survey stated that improvements in energy management and law and order have led to an upturn in confidence of the business community as the Business Confidence Index — Wave 12 — touched a record level of 36pc, showing an improvement of 14pc over the previous survey result announced in November 2015.

The LSM sector also benefitted from the continued improvement in the supply of electricity and gas, coupled with expansion in credit to private sector which remained high due to lower cost of credit and better market conditions. A welcome development is the rise in net credit disbursement for fixed investment.

Many firms are expanding their operations by availing fixed investment loan. Credit for fixed investment reached Rs150.147bn, an increase by 78pc during July-March FY-2016 against Rs84.365bn in comparable period of FY-2015. The expansion was particularly notable in sugar, fertiliser, pharmaceutical, telecommunications, road transport, construction of roads, manufacturing of electricity, machinery, cement, chemical sectors, etc.

In the automobile sector , growth was mainly achieved from LCVs production which increased by 48.70pc, buses 82.32pc, jeeps and cars 24.96pc, trucks 42.02 and motorcycles 17.28pc.The only decline was witnessed in the production of tractors which declined by 35.39pc. The improvement in the automobile sector is due to stable exchange rate, continuation of concessions under Apna Rozgar scheme launched by the Punjab government, appetite for new model and focus of commercial banks on auto financing.

The growth in chemical sector mainly arrived from sulphuric acid which recorded a growth of 17.50pc, paints and varnishes 14.08pc and caustic soda 24.08pc.

The exceptionally well performance mainly arrived due to construction activities and start of commercial operation by caustic soda producing unit.

In pharmaceuticals groups, capsules, injections, liquids/ syrups and tablets recorded a growth of 8.19pc, 11.61pc, and 8.02pc, respectively.

In non-metallic mineral products, cement managed to grow by 10.54pc during July-April FY-2016 over last year. The steep fall of global coal prices helped cement manufacturers. In addition, cement industry also benefitted through vibrant construction activities and reduction in policy rate.

Coke and petroleum products growth mainly arrived from the production of LPG 16.86pc, lubricating oil 13.32pc, motor sprits 1.49pc and jet oil 7.05pc.

The food, beverages and tobacco remained under stress mainly due to delay in cane crushing during this season.

However, some items showed positive growth during July-April FY-2016 which included tea blended which grew by 16.36pc, soft drinks 5.13pc, cooking oil 7.60pc, and vegetable ghee 5.91pc.

The production data of LSM has been received from the Oil Companies Advisory Committee (OCAC), comprising 11 items; ministry of industries and production comprising 36 items and provincial bureaus of statistics, comprising 65 items which contributed to LSM growth by 0.26pc, 2.96pc and 1.48pc, respectively.

Published in Dawn, June 25th, 2016