LSM output grows by 6.66pc in Oct as economic recovery gathers pace

ISLAMABAD – Pakistan’s large-scale manufacturing (LSM) output grew 6.66 per cent in October on the back of higher auto and cement production in the country.

The growth of large-scale manufacturing (LSM) industries was recorded at 5.46 percent in first four months (July to October) of the current fiscal year, showing that economic activities had revived in the country after the end of first wave of coronavirus. The latest data of Pakistan Bureau of Statistics (PBS) showed that LSM output has rebounded after suffering months of damage inflicted by Covid-19 mainly in the construction, sugar, automobile, and pharmaceutical sectors. The uptick during the month under review clearly reflects a revival in economic activities in the country.

Federal ministers have expressed satisfaction over the growth in LSM sector. “Industrial growth accelerates as economic recovery gathers pace. Large scale manufacturing grew by 5.46% in July to October 2020 vs same period last year. Growth in October was even higher at 6.66% vs October last year,” said Federal Minister for Planning and Development Asad Umar on Twitter. Meanwhile, Federal Minister for Industries and Production Hammad Azhar said that large scale manufacturing grew by 5.46% in Jul-Oct period. At a time when the global economy is in a deep recession, industry is driving economic growth and recovery in Pakistan, he added.

The LSM, which constitutes 80 percent of manufacturing and 10.7 percent of the overall GDP, had recorded growth of 6.66 percent during October 2020. The LSM sector had rebounded after contracting more than 10 percent in the previous fiscal year.

According to the PBS, production data of 11 items from Oil Companies Advisory Committee had registered a negative growth of 0.10 percent in July to October period of the year 2020-21. Similarly, the LSM data, provided by the Ministry of Industries and Production for 36 items, had also shown growth of 3.74 percent during the period under review. Meanwhile, the data provided by the provincial Bureaus of Statistics for 65 items had recorded growth of 1.63 percent over the same period.

Industrial growth has rebounded after suffering months of damage inflicted by Covid-19

The growth in LSM is mainly the outcome of increase in production of non metallic and minerals products that went up by 22.88 percent and pharmaceutical by 13.53 percent. Similarly, production of food, beverages and tobacco had enhanced by 12.16 percent. Meanwhile, production of paper and board had increased by 10.46 percent, followed by chemicals, whose production surged by 9.22 percent. The data showed that production of rubber products increased by 3.3 percent.

Meanwhile, according to the PBS data, wood products had recorded negative growth of 64.05 percent, leather products 43.18 percent; engineering products 34.05 percent and electronics had also recorded growth of 23.01 percent during the period under review. Production of iron and steel had gone down by 5.41 percent and automobiles 1.62 percent.

In auto sector, trucks production went down by 10.47 percent, buses 22.71 percent, trucks 10.47 percent, jeeps and cars 12.12 percent and LCVs 25.59 percent during the period under review.

In annual plan, the government has projected that industrial sector would grow by 0.1 percent during current fiscal year 2020-21. Manufacturing sector is targeted to contract by 0.7 percent based upon LSM contraction of 2.5 percent, small scale & household manufacturing growth of 6 percent.

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