ISLAMABAD: Large-scale manufacturing (LSM) grew 1.97 per cent year-on-year in the first two months of 2016-17, according to figures issued by the Pakistan Bureau of Statistics (PBS) on Wednesday.

With lower-than-expected LSM growth, the government is likely to revise the gross domestic product (GDP) growth target downward for the current fiscal year.

In July, LSM grew 2.62pc on a year-on-year basis. Its growth was 3.21pc in 2015-16.

LSM data provided by the Ministry of Industries and Production for 36 items showed growth of 1.1pc during the months under review.

Similarly, LSM data provided by the provincial bureaus of statistics for 65 items showed growth of 1.24pc for the two-month period.

However, the output of 11 items whose data is provided by the Oil Companies Advisory Committee decreased 0.37pc over the same period.

Industry-specific data shows that iron and steel products recorded the highest growth of 12.91pc, followed by non-metallic mineral products (13.69pc), pharmaceuticals (5.26pc), rubber products (4.39pc), fertilisers (4.01pc), automobiles (3.6pc), electronics (1.86pc), paper and board (1.11pc) and leather products (0.77pc).

Sectors that showed a decline included wood products (97.78pc), engineering products (17pc), coke and petroleum products (7.25pc), food, beverages and tobacco (0.4pc) and textile (0.19pc).

The decline in global commodity prices benefited many industries, such as food, automobile, cement, chemical and construction. Partially, LSM also benefitted from the improvement in the supply of electricity and gas coupled with an expansion in credit to the private sector.

In the automobile sector, growth is because of the increased production of trucks (59.95pc), buses (62.82pc) and motorcycles (12.66pc). However, the production of light commercial vehicles (LCVs) dropped 30.71pc year-on-year. The production of jeeps/cars and tractors decreased 2.14pc and 9.63pc, respectively.

The decline in the chemical sector was on the back of sulphuric acid, which recorded negative growth of 30.46pc as well as paints and varnishes (5.35pc) and caustic soda (24.22pc).

In pharmaceuticals, capsules, injections, liquids/syrups and tablets recorded growth of 12.51pc, 15.98pc, 7.04pc and 0.36pc, respectively.

In non-metallic mineral products, cement managed to grow 13.88pc year-on-year during the first two months. A steep fall in global coal prices helped cement manufacturers in recent years. In addition, the cement industry also benefitted from vibrant construction activities and a reduction in the benchmark interest rate.

The production of coke and petroleum products fell mainly due to the reduced production of diesel oil (67.43pc), kerosene (50.31pc), lubricating oil (1.44pc), jute batching oil (16.57pc), solvent naptha (59.92pc) and petroleum products (5.244pc). However, the production of LPG was up 13.8pc followed by jet fuel oil (8.57pc) and furnace oil (1.07pc).

In the food and beverages segment, the production of vegetable ghee witnessed growth of 0.92pc, cooking oil (4.75pc) and tea blended (11.6pc) on a year-on-year basis.

Published in Dawn October 27th, 2016

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