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LSM grows 1.26pc

July 14, 2012


ISLAMABAD, July 13: The large-scale manufacturing sector (LSM) recorded a paltry growth of 1.26 per cent in the first 11 months (July-May) of 2011-12 mainly owing to disruptions in energy supply and rising cost of inputs.

The output of LSM has been decelerated in the past couple of months due to drop in demands for goods in domestic and international markets, suggested data of Pakistan Bureau of Statistics (PBS) released on Friday.

In 2010-11 the LSM sector, which accounts for 70 per cent of industrial production, recorded a negative growth A growth of 1.40 per cent was posted in May 2012, making it one of the lowest growths the industry witnessed in the second half of the fiscal year 2011-12. The drop in output is because of energy shortages due to which the utilisation capacity remained low.

The capacity in the local industry and expected domestic demand based on high consumption trends remained the driving force in helping to stimulate revival.

In the 11 months, the major contribution in LSM growth was achieved from food, beverages and tobacco sectors as they increase by 6.44 per cent this year as compared to a year ago.

The pharmaceutical sector grew by 7.84 per cent; non-metallic mineral products by 2.68 per cent; paper and board 22.86 per cent; textile 0.45 per cent; leather products 0.68 per cent; automobiles 1.16 per cent and fertilisers 0.95 per cent.

But iron and steel products witnessed a negative growth of 25.26 per cent; petroleum product 6.99 per cent; electronics 7.86 per cent; chemicals 2.92 per cent; rubber products 24.93 per cent; engineering products 11.18 per cent; and wood products 0.91 per cent over the last year. However, government expected the economy to grow about 4.2 per cent.

The ministry of finance, recently, revised down the growth projection to 3.7 per cent. But the IMF, in its recent forecast, has put the growth rate at merely 2.6 per cent by the end of June 2012.

Many sub-sectors didn’t perform well in the July-May period as shown by the industry specific data; for instance, in the electronics, the production of deep freezers was down by 39.02 per cent, electric fans 2.99 per cent, electric motors 14.07 per cent, electric metres 15.73 per cent, switch gears 33.61 per cent, TV sets 37.52 per cent, storage batteries 17.15 per cent, and bicycles 25.69 per cent during the first 11 months this year over the last fiscal year.

However, refrigerators recorded a growth of 8.15 per cent, electric bulbs 2.36 per cent, electric transformers 70.13pc and electric tubes 25.64 per cent during the first 11 months this year over the last year, respectively.

The textile sector, which has an adjusted weight of 20.92 per cent in the LSM basket, recorded growth in 2011-12 over the previous year.

Only cotton yarn and cotton cloth (both semi-finished products) succeeded to improve with 0.74 per cent, 0.46 per cent, respectively.

So far, the best growth was witnessed in food, beverages and sugar. The sector has adjusted weight of 12.37 per cent in LSM basket; as vegetable ghee grew by 2.11pc; cooking oil 3.06pc, tea blended 16.34pc and wheat 3.69pc, beverages 13.57pc.

Another important sector is the automobile sector, in which tractors production dropped by 37.43pc, trucks 15.18pc during the July-May period this year over the last year. However, buses were up by 12.81pc, jeeps and cars 11.84pc, LCVs up by 9.14pc and motor cycles 1.31 per cent, respectively.