ISLAMABAD: Large-scale manufacturing (LSM) grew by 3.2 per cent in the preceding fiscal year, figures issued by the Pakistan Bureau of Statistics showed on Tuesday.

With lower-than-expected LSM growth, the government is likely to revise further downward the gross domestic product (GDP) growth from 4.7pc achieved during the fiscal year 2015-16. The projected GDP growth target was 5.7pc for the year.

In June, LSM was almost stagnant as compared to the same month of the last year.

The data of LSM provided by the Ministry of Industries and Production for 36 items and by provincial bureau of statistics for 65 items showed growth of 1.96pc and 1.28pc, respectively, during the year under review. However, output of the 11 items whose data is provided by the Oil Companies Advisory Committee fell 0.03pc.

The industry-specific data shows that automobiles recorded the highest growth of 16.1pc, followed by fertilisers 13.8pc, non-metallic mineral products 10pc, chemicals 8.1pc, pharmaceuticals 6.5pc, rubber products 7.2pc, leather products 7.8pc, food, beverages and tobacco 0.9pc, and textiles 0.4pc.

The other sectors that showed decline included coke and petroleum products 2.6pc, iron and steel products 9.3pc, electronics 1.7pc, paper and board 1.6pc, engineering products 14.4pc and wood products 65.8pc.

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

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

It appeared that many firms are expanding their operations by availing fixed investment loan. Credit for fixed investment has witnessed substantial growth during the outgoing fiscal year. The expansion was particularly notable in sugar, fertiliser, pharmaceutical, telecommunication, road transport, construction of roads, manufacturing of electricity distribution, machinery, cement, chemical sectors, etc.

In the automobile sector, the growth is mainly arrived from light commercial vehicles (LCVs) production which increased by 27.1pc, buses 86pc, jeeps and cars 17.6pc, trucks 40.3 and motorcycles 16.5pc.

The only decline witnessed in the production of tractors that declined by 28.6pc. The improvement in the automobile sector was due to stable exchange rate, continuation of concessions under the Apna Rozgar scheme, appetite of new models and focus of commercial banks on auto financing.

The growth in the chemical sector mainly arrived from sulphuric acid which recorded growth of 6.8pc, paints and varnishes 10pc and caustic soda 22.4pc. The growth came on the back of construction activities and start of commercial operations by caustic soda producing unit.

In the pharmaceutical groups, capsules, injections, liquids/syrups and tablets recorded a growth of 9.8pc, 12.5pc and 9pc, respectively.

In non-metallic mineral products, cement managed to grew by 10.1pc year-on-year during 2015-16. A steep fall in global coal prices helped cement manufacturers. In addition, the cement industry also benefitted through vibrant construction activities and reduction in policy rate.

Coke and petroleum products fell mainly from the production of furnace oil 1.3pc, diesel oil 38.5pc, high-speed diesel 1.7 and kerosene 15.9pc. However, the production of jet oil was up by 4.7pc, lubricating oil 11.3pc, liquefied petroleum gas 15.4pc and petroleum products by 38.7pc.

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 the previous fiscal year, including tea (blended) 18pc, soft drinks 6.3pc, cooking oil 5.3pc and vegetable ghee 4.5pc.

Published in Dawn, August 24th, 2016

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Afghan turbulence
Updated 19 Mar, 2024

Afghan turbulence

RELATIONS between the newly formed government and Afghanistan’s de facto Taliban rulers have begun on an...
In disarray
19 Mar, 2024

In disarray

IT is clear that there is some bad blood within the PTI’s ranks. Ever since the PTI lost a key battle over ...
Festering wound
19 Mar, 2024

Festering wound

PROTESTS unfolded once more in Gwadar, this time against the alleged enforced disappearances of two young men, who...
Defining extremism
Updated 18 Mar, 2024

Defining extremism

Redefining extremism may well be the first step to clamping down on advocacy for Palestine.
Climate in focus
18 Mar, 2024

Climate in focus

IN a welcome order by the Supreme Court, the new government has been tasked with providing a report on actions taken...
Growing rabies concern
18 Mar, 2024

Growing rabies concern

DOG-BITE is an old problem in Pakistan. Amid a surfeit of public health challenges, rabies now seems poised to ...