ISLAMABAD - The large-scale manufacturing (LSM) index entered negative growth of 0.90 percent during first five months of current fiscal year, causing fears that economic growth in the country is slowing down. The LSM growth had declined by 0.90 percent in July-November period of the fiscal year 2018-19 as compared to the corresponding period of previous year, reported the Pakistan Bureau of Statistics (PBS). Similarly, the LSM growth went down by 0.60 percent during November 2018 as against the corresponding period of previous year.

The slowdown in LSM growth indicates that economic activities have decelerated in the country. The tightening of monetary policy and massive depreciation of the rupee has increased the cost of production for the big industries, which are posting negative growth. The incumbent government had already downward revised the country’s GDP growth to 4.2 percent from projected 6.2 percent due to several reasons. These included a policy of fiscal consolidation adopted by the government due higher than anticipated fiscal deficit on the conclusion of last fiscal year, downturn in agriculture, negative growth in manufacturing sector and the expected programme of the International Monetary Fund (IMF).

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 Oil Companies Advisory Committee (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 0.45 percent during the first five months of the FY2019 over a preceding year. Similarly, the data provided by the provincial Bureaus of Statistics for 65 items showed negative growth of 1.03 percent over the same period. The output of 11 items, whose data is provided by the Oil Companies Advisory Committee, had decreased by 0.31 percent during the period under review.

The negative growth is mainly the outcome of dip in production of wood products 47.09 percent, followed by electronics 9.46 percent, iron and steel products 6.13pc, pharmaceuticals 7.62pc, coke & petroleum products 4.52pc, food, beverages & tobacco 0.38pc, non metallic mineral products 0.33pc and textile 0.12pc during July to November period of the current fiscal year.

As far as the main drivers of the LSM sector's growth during the period under review are concerned, engineering products sector recorded growth of 19.93 percent followed by paper and board that grew by 8.76 percent. Rubber products recorded 4.2 percent growth. Similarly, fertilizer sector grew by 5.87 percent. Meanwhile, chemicals and food, automobile and leather products had also recorded growth during the period under review.

In the automobile sector, the production of tractors went down by 12.42 percent, trucks 15.27pc and motorcycle production declined by 5.01pc. The production of light commercial vehicles had declined by 11.27pc during first five months of the ongoing fiscal year.

 However, the production of buses had enhanced by 17.6 percent. However, production of jeeps and cars had enhanced by 6.95 percent.

In non-metallic mineral products, cement posted a negative growth of 0.62 percent. In the food, beverages and tobacco segment, an increase of 3.24pc was recorded in cooking oil production. Other item that had witnessed an increase of 0.03pc was tea blended.