ISLAMABAD: Large-scale manufacturing (LSM) experienced a year-on-year negative growth of 1.09 per cent in the first month of the current fiscal year, data released by the Pakistan Bureau of Statistics showed on Monday.

On month-on-month, it witnessed a steeper contraction of 3.62pc in July.

The decline in LSM can primarily be attributed to a slowdown in production within the textile and clothing sectors focused on exports. In a concerning trend, the production of LSM has experienced negative growth since August 2022.

In FY23, the LSM shrank by 10.26 year-on-year. 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.

The significant number of job losses is a clear outcome stemming from the downturn experienced by major industries in FY23. The decrease in production capacity has resulted in a regrettable scenario, leaving numerous individuals unemployed.

The statistics shed light on the formidable obstacles confronting Pakistan’s manufacturing sector, fuelling apprehensions regarding the nation’s economic trajectory in the forthcoming months.

In July, the production of 16 sectors shrank and only eight posted a marginal rise.

The textile sector’s production shrank 22pc in July over a year ago. Major negative growth originated from yarn (29.88pc), and cloth (17.52pc). Nominal growth was reported in the production of other products. The production of garments grew 30.84pc in July.

In the food group, wheat and rice production increased by 6.91dc, cooking oil by 22.84pc, vegetable ghee 0.29pc and blended tea 46.58pc.

Petroleum products posted a negative growth of 2.26pc in the first month of 2023-24, mainly because of a decline in the production of petrol and high-speed diesel while almost all other petroleum products recorded a slowdown except solvent naptha, diesel oil and petroleum products. The auto sector also saw a 66.11pc slump in July as the production of almost all kinds of vehicles went down. In the month under review, there was a notable decline in iron and steel production, which experienced a decrease of 2.66pc. Similarly, the production of electrical equipment witnessed a significant drop of 22.38pc.

The production of fertilisers experienced a significant surge of 26.06pc, while the production of rubber items also witnessed a substantial growth of 10.24pc. The production of pharmaceutical products experienced a significant surge, with an impressive increase of 54.22pc.

Published in Dawn, September 19th, 2023

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