Big industry output contracts again

ISLAMABAD-The economic activities are continuously slowing down in the country, which could be gauged by the performance of the large-scale manufacturing (LSM) sector that has narrowed by 1.09 percent in the month of July this year.
According to data released by the Pakistan Bureau of Statistics (PBS) here, the LSMI index went down to 108.01 points in July 2023 as against 109.20 in the same month of the last year, showing a decline of 1.09 percent. On a month-on-month (MoM) basis, the industry growth declined by 3.62 percent during the month under review as compared to the month of June 2023.
The LSM is continuously showing negative growth, which shows economic activities have slowed in the country. The export-based manufacturers have already hinted at a decline in their production due to higher costs of energy and other inputs mainly because of the discontinuation of subsidized electricity. 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 PBS data showed that the sectors that have recorded positive growth included food (1.14 percent), tobacco (0.30 percent), wearing apparel (4.31 percent) chemical (0.49 percent), fertilizer 1.14 (percent), pharmaceuticals (2.28 percent) and non metallic mineral products have shown growth of (1.67 percent) in the month of July this year. On the other hand, the main contributors towards overall negative growth were beverages 0.42 percent, textile 4.68 percent; wood products have shown no growth, paper & board 0.38 percent, coke & petroleum products 0.16 percent and automobiles 2.59 percent in the period under review. It is worth mentioning here that the LSM witnessed a decline of 10.26 percent during FY2023 due to supply chain disruptions, inflationary pressures and resultant hike in input prices, and continued contractionary policy stance at the domestic level to correct the imbalances.
On a YoY basis, LSM nosedived by 14.96 percent in June 2023 and while on MoM basis, it inched up by 0.98 percent. During the period, 4 sectors witnessed positive growth which includes wearing apparel, leather products, furniture, and others (football). In July FY2024, the performance of the auto industry remained subdued due to massive increases in inputs prices, and tightening auto finance. Car production and sale decreased by 75.7percent and 64.3percent, while trucks & buses production and sale decreased by 72.3 percent and 28.8percent, respectively. The sale of petroleum products declined by 6 percent in July FY2024 to 1.35 mn tons against 1.44 mn tons in the same period last year. While on a MoM basis, it remained stable.

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