LSM sector growth shrinks by 3.28 percent in July
ISLAMABAD – The growth in large-scale manufacturing (LSM) sector shrank by 3.28 percent in July 2019 indicating that economic activities had slowed down in the country.
According to the latest data released by Pakistan Bureau of Statistics (PBS), the LSM growth had declined by 3.28 percent in the month of July 2019. The contraction came amid dismal performance in the food, beverages and tobacco, coke and petroleum products, pharmaceuticals, chemicals, and automobiles sectors raising fears of large-scale layoffs in the industrial sector.
Sector-wise, production data of 11 items from Oil Companies Advisory Committee registered a negative growth of 1.71 percent.
Similarly, the LSM data, provided by the Ministry of Industries and Production for 36 items, showed negative growth of 3.1 percent during the month of July this year. However, the data provided by the provincial Bureaus of Statistics for 65 items also showed growth of 1.53 percent over the same period.
The negative growth is mainly the outcome of dip in production of automobiles that went down by 27.41 percent, iron and steel products 15.44 percent, followed by coke and petroleum products, whose production declined by 25.12 percent.
Production of pharmaceuticals had also gone down by 12.13 percent, food, beverages and tobacco by 7.92 percent. The data showed that production of chemicals decreased by 5.94 percent and paper and board production also down by 3.32 percent.
Meanwhile, electronic products recorded growth of 67.23 percent, fertilizers 16.34 percent, wood products 8.44 percent, engineering products 8.08 percent and rubber products had also recorded growth of 2.92 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. Tractor production went down by 38.33 percent, light commercial vehicles 28.27 percent, trucks 59.46 percent, jeeps and cars 23.17 percent and motorcycles 24.41 percent during the period under review.
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 the non-metallic mineral products, cement dipped 0.13 percent in the period under review. The cement sector has been going through a major expansionary phase in recent years, mirroring the increase in economic activity in the country.