ISLAMABAD - Pakistan’s Large Scale Manufacturing (LSM) has recorded slower-than expected growth of 4.12 percent during eight months (July-February) of the current fiscal year, weighing on growth prospects.
For the ongoing financial year 2016-17, the government had targeted LSM growth at 5.9 percent. However, the LSM sector is recording much lesser growth as against the government’s projection. The International Monetary Fund (IMF) in its report had noted that slower-than expected growth of LSM and stagnant exports are weighing on growth prospects. The IMF estimated that Pakistan’s GDP would remain at around 5 percent as against the target of 5.7 percent due to the slower growth in industrial sector.
According to the Pakistan Bureau of Statistics (PBS), the LSM grew by only 8.4 percent during February 2017 as against same month of the last year. The PBS computes the quantum index numbers of the LSM on the basis of latest production data of 112 items received from various sources, including the OCAC, Ministry of Industries and Production and provincial Bureau of Statistics.
The LSM data, provided by the Ministry of Industries and Production for 36 items, showed growth of 3.08 percent during July-February period of the year 2016-17 over a year ago. Similarly, the data provided by the Provincial Bureaus of Statistics for 65 items showed growth of 0.99 percent over the same period. The output of 11 items whose data is provided by the Oil Companies Advisory Committee had increased by 0.05 percent during the period under review. The main drivers of the LSM sector's growth during the period under review were; paper and board that recorded growth of 5.71 percent iron and steel with growth rate of 16.15 percent, non-metallic mineral products with growth of 7.07 percent, pharmaceutical 8.48 percent, electronics 13.39 percent, automobiles 10.04 percent and fertilisers recorded growth of 0.21 percent.
The sectors, whose output declined, included wood production that plunged by 95.26 percent, leather products by 1.54 percent and chemicals 2.23 percent. The automobile sector witnessed growth due to 43.18 percent increase in truck production, 78.9 percent increase in tractors production, 20.93 percent increase in the production of buses and 21.63 percent increase in the production of motorcycles.
However, the production of light commercial vehicles (LCVs) dipped by 39.45 percent and jeeps and cars production enhanced by 2.59 percent. In the case of electrical appliances, production of refrigerators jumped by 24.2 percent, deep freezers’ production upped by 53.87 percent, that of electric-bulbs by 13.53 percent, production of storage batteries went up by 10.28 percent and electric meters production enhanced by 31.43 percent.
However, the production of air-conditioners declined by 22.29 percent, switchgears by 7.48 percent and production of electric transformers went down by 9.28 percent during the period under review. Meanwhile, manufacturing of cigarettes went down by 39.77 percent, that of jute goods by 18.76 percent, hessian 33 percent and phosphorus fertilisers 1.98 percent.