ISLAMABAD       -            The large-scale manufacturing (LSM) has once again recorded negative growth of 5.96 percent in January this year.

The LSM output had revived in December, posting growth after declining in eight consecutive months. However, in January, it has once again recorded negative growth of 5.96 percent, according to the data of Pakistan Bureau of Statistics (PBS).

The LSM, which constitutes 80 percent of manufacturing and 10.7 percent of the overall GDP, had recorded negative growth of 3.37 percent during seven months (July to January) of the current fiscal year.

The official data showed that growth of big industries like coke and petroleum products, pharmaceutical, chemical, automobiles, electronics and steel sectors had declined in first seven months of the ongoing fiscal year. Data revealed various factors that led to the slowdown included lower Public Sector Development Programme expenditures compared to last year, deceleration in the private construction activities and consumer spending on durable goods.

The government had set LSM target of 3.1 percent for the year 2019-20. However, the government might not achieve the LSM growth target due to the performance of major industries in first four months of the current fiscal year. According to the PBS, production data of 11 items from Oil Companies Advisory Committee had registered a negative growth of 0.63 percent in July to January period of the year 2019-20. Similarly, the LSM data, provided by the Ministry of Industries and Production for 36 items, had also shown negative growth of 3.32 percent during the period under review. However, the data provided by the provincial Bureaus of Statistics for 65 items had recorded negative growth of 2.01 percent over the same period.

The negative growth is mainly the outcome of dip in production of automobiles that went down by 36.07 percent and iron and steel products by 9.25 percent. Similarly, production of coke and petroleum products had declined by 10.59 percent. Meanwhile, production of pharmaceutical had decreased by 5.77 percent, followed by electronics, whose production declined by 8.5 percent. Production of engineering products had also gone down by 3.62 percent. The data showed that production of chemicals decreased by 3.2 percent.

Meanwhile, according to the PBS data, wood products had recorded growth of 25.07 percent; fertilizers 4.53 percent and leather products had also recorded growth of 11.15 percent during the period under review.

On a year-on-year basis, almost all vehicles in the auto sector posted decline in previous fiscal year. Policy measures like regulatory restrictions prohibiting non-filers from purchase of vehicles, and increase in interest rates dented the demand in the automobile segment to some extent. Furthermore, significant depreciation of PKR increased the cost of production, resulting in escalated prices and dampening the demand further.

In auto sector, tractors production went down by 37.22 percent, light commercial vehicles 45 percent, trucks 51.82 percent, jeeps and cars 45.99 percent and motorcycles 12.29 percent during the period under review.