ISLAMABAD: Large-scale manufacturing (LSM) posted a negative growth of 0.4 per cent in the first quarter of the current fiscal year from a year ago, official data of the Pakistan Bureau of Statistics showed on Wednesday.

The deceleration in industrial output in the current fiscal year indicates that economic growth will slip further in the next quarter. It is estimated that the second quarter will be more disturbing owing to the zero gas supplies to industrial units in winter.

The LSM swung to growth in September, posting an annual increase of 0.1pc compared to August, official data showed.

That was quite an improvement from July when the LSM shrank 1.4pc year-on-year. Economists have already raised concerns about an economic slowdown caused by record energy and raw material prices.

The main contributors to the slowdown in the first quarter were petroleum products (down 1.4pc), cement (1.4pc), pharmaceuticals (1.8pc), iron and steel products (0.2pc) and automobiles (1.5pc).

The output of 13 sectors shrank, and only nine sectors posted a paltry growth.

The slowdown started in June when manufacturing activity grew only 0.2pc compared to the previous month. In the previous fiscal year, large-scale manufacturing grew 11.7pc year-on-year. The production estimate for LSM industries was made using the new base year of 2015-16.

During the 2021-22 fiscal year, the large-scale manufacturing sector, which accounts for 9.2pc of GDP, dominated the overall manufacturing sector with 74.3pc of the sectoral share, followed by a 15.9pc share of small-scale manufacturing, or 2pc of GDP.

In July-September, the textile sector shifted into reverse, shrinking by 3.3pc over a year ago. Major negative growth originated from knitting wool (down 100pc) and woollen blankets (down 52.9pc). Nominal growth was reported in the production of yarn and cloth.

Published in Dawn, November 17th, 2022