Economy shrinks as LSM growth falls by 1.71pc

ISLAMABAD – The growth of large-scale manufacturing (LSM) has shrunk by 1.71 percent during first quarter (July to September) of the current fiscal year (FY2019) indicating that economic activities have slowed down in the country.

The LSM growth has declined by 1.71 percent during July to September period of the FY2019, according to the data released by Pakistan Bureau of Statistics (PBS). However, the LSM growth went up by 1.83 percent during September 2018 as against the corresponding period of previous 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 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 negative growth of 0.38 percent during the first three months of the FY2019 over a preceding year. Similarly, the data provided by the provincial Bureaus of Statistics for 65 items showed decline of 0.95 percent over the same period. The output of 11 items, whose data is provided by the Oil Companies Advisory Committee, had decreased by 0.38 percent during the period under review.

As far as the main drivers of the LSM sector’s growth during the period under review are concerned, electronics sector recorded growth of 7.76 percent followed by engineering products that recorded 6.12 percent growth. Similarly, paper and board grew by 4.2 percent. Meanwhile, rubber and leather products had also recorded growth of 5.07 percent and 1.47 percent respectively during the period under review.

On the other hand, wood products recorded negative growth of 54.85 percent and growth of food, beverages and tobacco sector down by 4.22 percent. Meanwhile, fertilizer sector’s growth declined by 4.78 percent, pharmaceutical by 3.74 percent and non-metallic mineral products growth went down by 1.54 percent. Similarly, growth of iron & steel products, automobiles, coke & petroleum products and textile sector had also recorded negative growth during first three months of the ongoing fiscal year.

In the automobile sector, the production of tractors went down by 10.75 percent, trucks 16.44pc and motorcycle production declined by 6.32pc. Production of buses has also reduced by 4.42 percent and production of light commercial vehicles dipped by 4.25 pc during July to September t period of the ongoing fiscal year.  However, production of jeeps and cars has gone up by 4.67pc.

In non-metallic mineral products, cement posted a negative growth of 1.41 percent. In the food, beverages and tobacco segment, a decrease of 9.37pc was recorded in cooking oil production. Other items that witnessed a negative growth were tea blended by 0.43pc and wheat & grain milling 2.36pc.

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