ISLAMABAD-Large-scale manufacturing (LSM) posted a negative growth of 5.49 percent in November last year over the same month last year mainly due to the slowdown in economic activities in the country.
This was the third consecutive month for big industry to have posted a negative growth rate, according to data released by the Pakistan Bureau of Statistics. The industrial sector is recording negative growth mainly due to slowdown in economic activities amid uncertainty on political front, suspension of gas supplies to industries and unavailability of raw materials. Ministry of finance had already projected that pressure on LSM is likely to be sustain in November if the negative shocks are continuing to prevail and outpace the LSM output which may gain some momentum as sugarcane crushing starts in November. It stated that firstly, the weighted average cyclical output gap in Pakistan’s main trading partners’ remains in negative territory and continues to widen gradually, which implies reduction of global demand. Secondly, the impact of floods-induced destruction of agricultural output may start finding its way into the industrial sectors. Thirdly, Pakistan’s official reserves are at relatively low levels, necessitating restrictive monetary policy and other measures to limit imports. According to the PBS data, there was a negative growth of 7.75 percent in October, 2.27 percent in September on a year-on-year basis, compared to a sluggish growth of 0.30pc in August and a negative growth of 1.67pc in July, the first month of the current fiscal year. Economists have been raising concerns about a slowdown caused by record energy and raw material prices. Moreover, export-based manufacturers have already hinted at a decline in their productions due to higher cost of energy and other inputs. The main contributors to the slowdown in November were wood products, down 63.61 percent, automobiles 28.73 percent, tobacco 22.32 percent, pharmaceuticals 23.22 percent, machinery and equipment 41.73 percent, rubber products 9.06 percent, textile 11.45 percent, beverages 5.42 percent and food 7.78 percent. The major sectors that showed positive growth during July-November (2022-23) included wearing apparel (51.48 percent), leather products (8.18 percent), electrical equipment (1.6 percent), furniture 99.29 percent) and other manufacturing 59.68 percent.