LSM grows by modest 2.25pc in July

Published September 16, 2021
On a month-on-month basis, the big industry production contracted by 4.91pc. — AFP/File
On a month-on-month basis, the big industry production contracted by 4.91pc. — AFP/File

ISLAMABAD: The Large Scale Manufacturing (LSM) grew by 2.25 per cent in July, reflecting a slowdown in industrial output, data released by the Pakistan Bureau of Statistics (PBS) showed on Wednesday.

The slowdown in the first month of the current financial year is in stark contrast compared to the previous few months when the industrial growth was in double digits with a claim of revival of industrial production after a slump because of a countrywide lockdown due to the Covid-19 pandemic.

In the outgoing financial year, the LSM showed highest growth of 14.85pc and the government claimed that slums in industrial production has come to an end.

On a month-on-month basis, the big industry production contracted by 4.91pc.

Since July 2020, the LSM has rebounded after suffering months of a downturn on account of the Covid-19 pandemic, mainly in the automobile, construction, textile, food, chemicals, non-metallic mineral products and pharmaceutical sectors.

The PBS snapshot of manufacturing activity showed that 11 out of 15 sub-sectors in the LSM rose in July. Low interest rates and reduction in duties on raw materials are expected to further spur economic activities during the current financial year.

The production has witnessed increase in textile, pharmaceuticals, chemicals, automobiles, iron & steel products and fertilisers, while it decreased in non-metallic mineral products, and paper & board.

Sector-wise, production of 11 items under the Oil Companies Advisory Committee fell by 3.57pc year-on-year in July. The 36 items under the Ministry of Industries and Production rose by 1.40pc, while 65 items reported by the provincial bureaus of statistics were up by 5.22pc.

The LSM at 9.73pc of GDP dominates the overall manufacturing sector, accounting for 76.1pc of the sectoral share. It is followed by Small Scale Manufacturing which accounts for 2.12pc of total GDP and 16.6pc sectoral share.

According to the Pakistan Economic Survey 2020-21, despite the issues raised in the ongoing Covid-19 pandemic, the manufacturing sector remained sound and resilient during FY21 on the back of well in time government initiatives.

It further said the government’s thoughtful decision to resume business activities and adoption of smart lockdowns boosted sentiments and the economy gained traction after witnessing a hefty decline in FY20.

As per the PBS data, the entire automobile sector excluding buses showed strong growth in July 2021 compared to the same period from a year ago. Production of tractors rose by 38.35pc, trucks by 10.20pc, jeep and cars by 92.19pc, LCVs by 66.16pc and motorcycles by 8.22pc in July. However, the production of buses declined by 79.59pc.

Cement output also dipped by 10.02pc in July despite the fact that there is a greater demand following the start of construction activities and increase in exports. In the steel sector, billets and ingots also posted a growth of 9.01pc. The production of paints and varnishes declined by 2.14pc and cigarettes by 13.71pc.

In pharmaceuticals, the output of tablets dipped by 24.07pc, injection by 36.53pc, and capsules by 18.39pc. However, the output of syrups is up by 86.67pc.

On the other hand, cooking oil production rebounded and posted a growth of 5.20pc and tea blended by 32.32pc. However, vegetable ghee production fell by10.69pc while wheat and grain milling output dipped by 1.26pc.

The PBS data for April showed that output of petroleum products fell by 3.57pc across the board. The output of two oil products — petrol and high-speed diesel — was up by 1.16pc and 5.29pc, respectively, whereas furnace oil production fell by 15.52pc, kerosene oil 2.09pc.

The production of LPG was up by 11.41pc, followed by lubricating oil 131.39pc, jute batching oil 7.74pc and solvent naphtha by 12.87pc, respectively.

Published in Dawn, September 16th, 2021

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