ISLAMABAD   -   The large-scale manufacturing (LSM) index posted negative growth of 3.51 percent during ten months (July to April) of the current fiscal year. The LSM growth had declined by 3.51 percent in July-April period of the fiscal year 2018-19 as compared to the corresponding period of previous year, reported the Pakistan Bureau of Statistics (PBS). Similarly, the LSM growth went down by 7.76 percent during April as against the corresponding period of previous year.

There are a number of factors which contributed to the slowdown in the growth of LSM including lower PSDP expenditures compared to last year, slowdown in the private sector construction activities and consumer spending on durable goods. This was more noticeable in construction-allied industries. Demand for housing moderated as the price of building materials and cost of financing increased. Certain sector-specific issues also contributed to the decline in LSM. Automobile prices witnessed multiple upward revisions due to PKR depreciation which held the potential buyers refrained from making booking and purchases. Certain restrictions on non-filers with respect to purchase of cars further dampened the automobile demand. Pharmaceutical also suffered due to a considerable lag in regulatory adjustments in prices. This pricing issue was in addition to weakening of the local currency, which added to the distress of an import dependent sector. Similarly, lower sugarcane production and previous year’s inventories further dampened the prospects of the sugar industry. The LSM data, provided by the Ministry of Industries and Production for 36 items, showed negative growth of 3.01 percent during the first ten months of the FY2019 over a preceding year.

 

 Similarly, the output of 11 items, whose data is provided by the Oil Companies Advisory Committee, had decreased by 0.39 percent during the period under review. However, the data provided by the provincial Bureaus of Statistics for 65 items showed nominal decline of 0.11 percent over the same period.

The negative growth is mainly the outcome of dip in production of iron and steel products 10.97 percent, automobiles 9.39 percent, pharmaceutical products 7.34 percent, followed by food and beverages & tobacco 6.99 percent and coke & petroleum products 6.34 percent. Similarly, other sectors including chemicals included negative growth of 3.96 percent and non metallic mineral products 3.96 percent and paper and board down by 2.2 percent.

Meanwhile, wood products recorded growth of 23.63 percent, electronics 17.32 percent, engineering products 9.23 percent, fertilizer 5.17 percent and rubber products had also recorded growth of 3.4 percent during the period under review.

Sugar production fell 18.39 percent to 5.275 million tons in the July-April 2018/19, while in April 2019, its production decreased by 53.52 percent over same month of last year. Cotton yarn production increased by 0.02 percent to 2.859 million tons in these ten months, and in April it increased by 0.3 percent. Cement output was down 4.38 percent to 33.48 million tons, while it increased 4.23 percent year-on-year in April 2019. Cars and jeeps production declined 2.93 percent to 190,913 in ten-month period, while 27.19 percent dip was seen in April.