ISLAMABAD: Large-scale manufacturing (LSM) shrank 25 per cent in March over the same month last year, the highest monthly decline since the Covid-19 pandemic, showed data released by the Pakistan Bureau of Statistics on Monday.
The big industry production contracted for the seventh consecutive month of the current fiscal year mainly contributed to a slowdown in the production of export-based textile and clothing industries.
The decline in export proceeds also reflected that overall economic growth will decline in the coming months. It is believed the slowing down of big industries has rendered a large number of workers jobless.
It is estimated that the fourth quarter (March-June) of 2022-23 will be more disturbing owing to the discontinuation of subsidised energy to industries along with the highest-ever cost of raw materials and other inputs due to the depreciation of the rupee and high energy costs.
The International Monetary Fund has recently revised downward the economic growth to 0.5pc for FY23. Similar projections came from the World Bank and Asian Development Bank at 0.4pc and 0.6pc, respectively.
In February, the LSM growth declined by 11.6pc on a year-on-year basis, as against 7.9pc in January, a 3.51pc dip in December 2022. There was a negative growth of 5.49pc in November 2022, 7.7pc in October 2022 and 2.27pc in September 2022 on a year-on-year basis. While a paltry rise of 0.30pc was recorded in August after LSM shrank 1.67pc in July, the first month of the current fiscal year.
Between July and March, LSM also posted a negative growth of 8.11pc on a year-on-year basis.
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.
In March, the production of 19 sectors shrank and only one posted a marginal rise.
The textile sector’s production shrank 30.74pc over a year ago. Major negative growth originated from yarn (30.10pc), and cloth (17.73pc). Nominal growth was reported in the production of other products.
The production of garments posted a growth of 11.03pc during March. Its performance remained positive in the first seven months except for February when it witnessed a negative growth.
In the food group, wheat and rice production dipped by 11.17pc and tea blended by 1.71pc. However, the production of cooking oil was up by 13.69pc and vegetable ghee by 23.99pc, respectively.
Petroleum products posted a negative growth of 16.06pc in March, mainly because of a decline in the production of petrol and high-speed diesel while almost all other petroleum products recorded a slowdown except jet fuel, kerosene, jute and batching oil.
The auto sector also saw a 24.68pc slump in March as the production of almost all kinds of vehicles went down, except for diesel engines.
The production of iron and steel dipped 5.07pc during March mainly because of a decline of 13.21pc in billets/ingots, whereas that of non-metallic mineral products dipped 22.19pc. However, chemical products posted a negative growth of 8.79pc in March from a year ago.
The production of pharmaceutical products dipped 28.10pc, rubber products 12.80pc and fertilisers 22.08pc in March from a year ago.
Published in Dawn, May 16th, 2023
