KARACHI - Having the largest share in local consumer durables industry and being a main component of large scale manufacturing sector, the growth in cars and jeep production showed a steep decline of 47.2 per cent during July-September 2008-09 due to energy constraints, high input cost of auto assemblers, high metal prices, slowdown in auto loans demand and depreciation of rupee. According to the Federal Bureau of Statistics, the LSM sector has recorded negative growth of 6.2pc in the first three months of the current FY as against the corresponding months of the last FY-08. As per the statistics, within automobiles group buses, motor cycles, cars and jeeps have registered negative growth in the first three months of 2007-08. The main contributors of large scale manufacturing for the first three months (July- Sep) are: vegetable Ghee (-12.49 percent), cement (0.64 percent) etc. However, LCVs, tractors and trucks have maintained a healthy growth rate. Similarly, within electrical group production of electric motors, refrigerators and TV sets have also registered negative growth. The FBS also depicted that among electronics group a positive growth was witnessed in the output of electric fans only. Petroleum production, on the other hand, registered a decline of 7.18 percent in the months of September 2008-09. This slow down in petroleum production was brought about due to sky rocketing global oil prices. Therefore during the consolidated first three months of 2008-09, the oil refineries production registered negative growth of 5.41 percent. It is pertinent to mention here that in the period of July-September FY09 the appreciation of yen and a sharp rise in aluminum and copper prices increased the manufacturing cost of the auto assemblers. The resultant increase in car prices, coupled with a downward trend in auto financing also dampened the demand for jeeps and cars. Moreover, the slowdown in cars' production during the specific course of FY09 also moderated the demand for rubber tyres and tubes as a decline is evident in their production as well as imports. Similarly, the manufacturing of glass sheets also slowed down following the lower demand from automobile and construction industries. Although, global metal prices have started receding from Q3-FY08 onwards, the current state of the domestic automobile industry shows that the chances of recovery in consumer durable industry appear remote. This is because import duty on CKD of almost all the electronic items has been increased which will put upward pressure on the prices of these items. Moreover, a few measures taken to protect local auto industry including increase in import duty on CBUs and decline in duty on CKDs and the impact of these measures on autos production will be partiality offset by increase in car prices following the imposition of sales tax and FED on car sales. More importantly, ease in demand for cars, due to both rise in prices and mark-up on auto financing will not support recovery in automobile industry at least in the short-term. Pakistan's economy is facing negative industrial growth for the last four months (July- Sep) consecutively largely owing to the growing power shortages, cumulative impact of monetary tightening, rising cost of doing business as well as the current global economic conditions. From 2000-01, the large-scale manufacturing sector as a result of a fast expanding economy, moved from one peak to another and reached its zenith at 19.9 percent in 2004-05. During the last three years or so the LSM sector is showing signs of moderation along with a subsequent slowing down of the economy and has thus registered a negative growth of 6.2 percent during the first quarter of the current fiscal year 2008-09.