Big industry output plunges 25pc in May

Updated 22 Jul 2020

Email

During July-May, the LSM shrank by 10.32pc from a year ago. — AFP/File
During July-May, the LSM shrank by 10.32pc from a year ago. — AFP/File

ISLAMABAD: The large-scale manufacturing (LSM) output tumbled by 24.8 per cent year-on-year in May, the Pakistan Bureau of Statistics (PBS) reported on Tuesday.

It is believed that exchange rate depreciation, contractionary monetary and fiscal policies (before coronavirus outbreak) plunged the LSM in the FY20. Contraction in textile and food, beverages and tobacco, iron and steel, coke and pet roleum products dampened the overall manufacturing in the country.

During July-May, the LSM shrank by 10.32pc from a year ago.

Sector-wise, production of 11 items under the Oil Companies Advisory Committee went down by 20.87pc during MFY20, 36 items under the Ministry of Industries and Production by 11.78pc while 65 reported by the provincial Bureaus of Statistics fell 4.4pc.

LSM constitutes 80pc of the country’s total manufacturing and accounts for nearly 10.7pc of the national output. In comparison, small-scale industry makes up for just 1.8pc of GDP and 13.7pc of the secondary sector.

According to Economic Survey 2019-20, LSM was not able to withstand a constrained environment and the distress continued during the outgoing fiscal year. This big industry provides employment opportunities to about 16.1pc of the total labour force while its share in the GDP is around 13-14pc.

As per the last data, auto sector was a major laggard with massive declines in sales over the last few quarters on account of multiple upward price revisions due to currency depreciation.

On a yearly basis, the sector registered sales decrease in almost all variants excluding tractors, which was up by 10.77pc in May from a year ago. The production of buses and trucks plunged by 100pc, while that of jeeps and cars by 94.67pc, LCVs 95.69pc, and motorcycles 69.38pc.

Meanwhile, the output of sugar edged lower by 3.69pc year-on-year in May while that of cement fell 35.37pc.

The pharmaceutical sector posted growth as a result of increase in prices with output of syrups higher by 10.07pc, capsules 19.73pc, and tablets 2.35pc whereas that of injections fell 3.8pc during May.

Cooking oil and vegetable ghee declined 0.75pc and 3.46pc, respectively whereas blended tea surged by 23.57pc.

At the same time, production of electronic goods contracted, thanks to declines in refrigerators, deep freezers, air-conditioners, electric--bulbs, tube, fans, motors, meters, switch gears, tv sets etc.

The production of tubes, tyres and machinery also went down during the month under review.

Published in Dawn, July 22nd, 2020