ISLAMABAD: Large-Scale Manufacturing (LSM) experienced a significant year-on-year contraction of 14.37 per cent in May, showed data released by the Pakistan Bureau of Statistics on Thursday.
This marks the ninth consecutive month of decline for the country’s major industries during the outgoing FY23. The primary reason behind this decline can be attributed to a slowdown in the production of export-oriented textile and clothing sectors.
The consequences of this downturn in large industries are evident in the form of a significant number of job losses. The reduction in production capacity has led to an unfortunate situation where many individuals were rendered jobless.
These statistics highlight the challenges faced by Pakistan’s manufacturing sector and raise concerns about the overall economic performance of the country in the coming months.
The growth of LSM experienced a decline in May compared to the same month last year. The decline was 21pc in April, which is lower than the decline of 25pc in March, 11.6pc in February, and 7.9pc in January. In December 2022, there was a small decrease of 3.51pc.
In November 2022, there was a negative growth of 5.49pc, while in October 2022, it declined by 7.7pc. In September 2022, there was a decrease of 2.27pc compared to the same month last year. In August, there was a slight increase of 0.30pc after a decline of 1.67pc in July, which was the first month of the current fiscal year.
Between July and May, LSM also posted a negative growth of 9.87pc on a year-on-year basis.
In FY22, the LSM expanded by 11.7pc year-on-year. The production estimate for LSM industries was made using the new base year of 2015-16.
In May, the production of 16 sectors shrank and only four posted a marginal rise.
The textile sector’s production shrank 25.97pc over a year ago. Major negative growth originated from yarn (29.89pc), and cloth (17.49pc). Nominal growth was reported in the production of other products.
The production of garments posted a growth of 12.86pc during May. Its performance remained positive in the first 10 months except for February when it witnessed a negative growth.
In the food group, wheat and rice production dipped by 0.36pc and starch and its products by 2.15pc. However, the production of blended tea was up by 39.99pc, cooking oil by 24.45pc and vegetable ghee by 23.80pc, respectively.
Petroleum products posted a negative growth of 21.85pc in May, 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 68.60pc slump in May as the production of almost all kinds of vehicles went down.
The production of iron and steel dipped 5.83pc in May mainly because of a decline of 15.09pc in billets/ingots, whereas that of non-metallic mineral products saw a paltry growth of 0.53pc. However, chemical products posted a negative growth of 15.44pc in May from a year ago.
The production of pharmaceutical products dipped 38.61pc, rubber products 5.81pc and fertilisers 13.31pc in May from a year ago.
Published in Dawn, July 14th, 2023
