LSM output grows 11.7 percent in FY22
ISLAMABAD: Pakistan’s large-scale manufacturing (LSM) grew 11.7 percent in FY2022 over the previous year, mainly on the back of increasing global demand and favourable government policies to jack up the GDP growth as big industries contribute a tenth to the economy.
Similarly, in June 2022, LSM output was up 11.5 percent over the corresponding month a year ago, while it showed a 0.2 percent expansion over the previous month (May), data released by the Pakistan Bureau of Statistics (PBS) showed on Tuesday.
Figures were calculated while considering the fiscal year 2015/16 as the base year.
In FY2021, the LSM output recorded a growth of 11.2 percent, however in FY2020, it had sizably declined by 11.1 percent.
Apart from increased global and local demand, the government’s policies of providing gas and electricity at subsidised and regional competitive prices also helped boost its output. Recently, the incumbent government also decided to provide uninterrupted RLNG supply to five export-oriented sectors at $9/mmBtu and electricity at 9 cents/kWh for the whole of FY2023.
The predictability of energy supply at subsidised rates by the government would encourage manufacturers to produce more in the months to come. However, still, the high-interest rate by the banks on loans is a discouraging factor, affecting industrialists to expand their businesses.
According to the data, out of 24 sectors of the LSM, 21 witnessed positive growth from July to June 2021-22. The major sectors that showed growth over the same period of last year were food, beverages, tobacco, wearing apparel, textile, chemicals, automobiles, iron and steel products, pharmaceuticals, leather products, and paper and paperboard. Sectors that retreated were rubber products, fabricated metals, and other transport equipment production.
Pakistan’s manufacturing sector has three heads including LSM, small-scale manufacturing, and slaughtering. The LSM contributes 9.2 percent to GDP. It dominates the overall manufacturing sector, accounting for 74.3 percent of the sectoral share followed by small-scale manufacturing, which accounts for 2.0 percent of total GDP and 15.9 percent sectoral share. The third component, slaughtering, accounts for 1.2 percent of GDP with a 9.7 percent sectoral share. The manufacturing sector contributed 12.4 percent to the country’s GDP.
The statistics office further said that during July-June FY22, the food sector grew 8.4 percent, beverages 0.5 percent, tobacco 15.9 percent, sugar 39.1 percent, textiles 3.5 percent, garments 49.4 percent, leather products 0.8 percent, wood products 115.7 percent, paper and board 10.6 percent, coke and petroleum products 0.7 percent, all chemicals 9.0 percent (in which chemical products output increased 19.4 percent and fertilisers 2.7 percent).
Similarly, pharmaceuticals’ output increased by 13.7 percent, computer, electronics, and optical products output went up 3.6 percent, electrical equipment 2.6 percent, and non-metallic mineral production increased by a percent over the last year.
Besides, iron and steel products grew 16.3 percent, machinery and equipment 15.4 percent, automobiles 49.4 percent, coke & petroleum products 0.7 percent, furniture 180.2 percent, and other manufacturing (footballs) were up 43.2 percent over the same period of last year.
However, the production of rubber products declined 15.8 percent, fabricated metal 3.8 percent, and other transport equipment production went down 11.2 percent over last year. Cement production also declined by 3.6 percent.
On a year-on-year basis, in June 2022, beverages output was up 4.4 percent, tobacco 70.4 percent, wearing apparel 47.1 percent, wood products 2.8 percent, paper and board 32.9 percent, sugar 35.2 percent, chemicals 8.7 percent (of which chemical products output was up 19.5 percent, and fertiliser was 1.5 percent), pharmaceuticals 86.3 percent, iron and steel products 14.1 percent, non-metallic mineral production 6.3 percent, fabricated metal 6.2 percent, computer, electronics, and optical products 13 percent, electrical equipment 10.8 percent, machinery and equipment 39.9 percent, automobiles 25.2 percent, and other manufacturing (footballs) 44.9 percent over the production of the same month last year.
The food production was down 11.4 percent, textiles 3.6 percent, coke & petroleum products 9.2 percent, furniture 40.8 percent and other transport equipment production declined 13.6 percent over the corresponding month of the last year.
The PBS also reported LSM data based on FY2005-06. According to this calculation, LSM growth arrives at 8.2 percent in June 2022 over the same month of the last fiscal and 14.4 percent expansion over the previous month. Whereas, July-June 2021-22 average LSM growth was recorded at 7.7 percent over the same period of the last fiscal.