ISLAMABAD: Large-scale manufacturing (LSM) posted a robust growth of nearly 13 per cent year-on-year in the first month of this fiscal year against the projected target of 6.3pc, the Pakistan Bureau of Statistics (PSB) data showed on Thursday.
The higher-than-expected LSM growth suggests that the government is likely to achieve the 6pc GDP growth target set for the current fiscal year. In 2016-17, the LSM expanded 5.6pc.
Former Finance Secretary Dr Waqar Masood Khan told Dawn that the growth recorded in the LSM is a positive development. However, he said that the government will have to put its economic policies in order. Mr Khan was referring to the recent debate whether Pakistan will opt for the next IMF programme or not.
LSM constitutes 80pc share within manufacturing and 10.7pc in the overall GDP. Contrary to this, small-scale manufacturing accounts for 1.8pc in GDP and 13.7pc within the manufacturing sector.
Production data of 36 items received from the Ministry of Industries contributed 10.51pc to LSM growth in July. The contribution of 65 items received from the provincial bureaus of statistics remained 2.12pc. Production data of 11 items received from the Oil Companies Advisory Committee (OCAC) contributed 0.35pc to LSM growth in July.
Industry-specific data shows that iron and steel products recorded the highest growth of 46.36pc followed by automobiles (42.56pc), non-metallic mineral products (37.95pc), engineering products (21.95pc), food, beverages and tobacco (19.02pc), paper and board (11.23pc), pharmaceuticals (11.14pc), wood products (10.95pc), chemicals (5.13pc), coke and petroleum products (4.87pc), rubber products (4.51pc), leather products (2.52pc), and textile (0.43pc).
Sectors that showed decline during the month under review are fertilisers (0.80pc), and electronics (0.91pc).
The LSM sector mainly benefitted from the continued improvement in the supply of electricity and gas coupled with an expansion in credit to the private sector. The expansion in credit to the private sector remained high due to a lower cost of credit and better market conditions.
Other sectors: In the automobile sector, the production of tractors went up by 146pc year-on-year in July, trucks 24.4pc, motorcycles 26.4pc. The production of light commercial vehicles (LCVs) increased year-on-year by 16pc, jeeps and cars (55.77pc) during the month under review. However, the production of buses dropped by 31.3pc during the same period.
The chemical sector also witnessed a positive growth during the first month of the current fiscal year mainly because of an increase in caustic soda (24pc), paints and varnishes-small (0.22pc).
In the pharmaceutical segment, capsules, injections, liquids/syrups and tablets recorded growths of 19.27pc, 10.85pc, 10.58pc and 10.29pc, respectively.
In non-metallic mineral products, cement grew by 38.3pc in July compared to a year ago. The steep fall in global coal prices has helped cement manufacturers increase production. In addition, the cement industry also benefitted from vibrant construction activities and a reduction in the benchmark interest rate.
In the food, beverages and tobacco, the highest growth of 207pc was recorded in sugar production in July over the last year on account of a rise in sugarcane crop, rising domestic prices and wide usage of ethanol in power generation by manufacturers.
The other items which recorded positive growth are vegetable ghee whose production rose by 25.49pc, cooking oil 11pc, blended tea 9.4pc, wheat and grain milling 3.48pc.
In the engineering sector, the production of diesel engines increased by 377pc and safety razor blades by 10.89pc.
Published in Dawn, September 22nd, 2017