The LSM sector has recorded growth of 11.5 percent in June over the same period of the previous year, according to the latest data of Pakistan Bureau of Statistics (PBS). On monthly basis, the big industries had shown minor growth of 0.2 percent in June 2022 as compared to the May this year. Earlier, the LSM sector was showing negative growth in May and April on monthly basis mainly due to prevailing energy crisis and increase in cost of production.
The production estimation for LSM industries was made on the new base year of 2015-16. However, the PBS also released a separate estimation with old base of 2005-06. As per the old base 2005-06, the LSM grew by 14.2 percent in June compared to a year ago. On a month-on-month basis, the industry’s production increased by 8.2 percent. The growth is calculated at 7.7 percent in entire last fiscal year on the basis of the old base-2005-06.
According to the PBS data, wood products output has increased by 115.7 percent, automobiles 49.4 percent, food 8.4 percent, tobacco 15.9 percent, textile 3.5 percent, furniture 180.2 percent, machinery and equipment 15.4 percent and iron and steel products 16.3 percent during the fiscal year 2021-22 compared to the same period last year. The sectors showing decline during July-May 2021-22 compared to the same period of the previous year included rubber products 15.8 percent, fabricated metal 3.8 percent and other transport Equipment 11.2 percent.
On monthly basis, big industries had shown minor growth of 0.2 percent in June 2022 as compared to May
As per the PBS data, the entire automobile sector showed strong growth of 49.4 percent in June compared to the same period a year ago. Production of jeeps and cars had increased by 51 percent and 50.5 percent respectively in June this year. On the other hand, the production of LCVs surged by 37.7 percent, and buses by 18.8 percent. The production of motorcycles had dipped by 11.5 percent. In the non-metallic mineral sector, the production of cement output dipped by 3.6 percent in June 2022. The production of glass plates and sheets had increased by 79.2 percent. In the steel industry, billets and ingots increased by 33 percent.
In annual plan 2022-23, the broad-based revival of LSM is projected to slow down to 7.4 percent during 2022-23 mainly because of adjustments in fiscal and external sectors. The momentum through exports of textiles is likely to keep growth at decent level. Moreover, collateral-free credit guarantee scheme for SMEs will also underpin overall manufacturing sector growth prospects.
There are downside risks of high cost and low supplies of energy inputs, exchange rate related uncertainties and Russia-Ukraine war related supply shocks, which can impact manufacturing sector. However, the buoyancy in construction sector, with spillovers in allied industries, and with the new entrants in the car industry, the overall manufacturing sector is projected to post growth of 7.1 percent during 2022-23.