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LSM contracts 1.19pc in October

LSM contracts 1.19pc in October

ISLAMABAD: Large-Scale Manufacturing (LSM) shrank by 1.19 per cent in October from the same month a year ago, showed the data released by the Pakistan Bureau of Statistics (PBS) on Thursday.

The lowest growth in LSM was noted in September 2021 at 1.19pc, which fell from 12.74pc in August. The second-lowest LSM expansion was observed in July at 2.25pc. The current financial year started with a paltry growth in LSM.

On a month-on-month basis, the big industry production increased by 1.86pc.

The negative growth in October is in stark contrast of the growth of preceding months. The government claimed revival of industrial production after a long slump due to the Covid-19 pandemic.

In the first four months (July-October) of the current financial year, LSM grew by 3.56pc on a year-on-year basis.

During the previous financial year, the LSM showed the highest growth of 14.85pc and the government claimed that the slump in industrial production has come to an end.

Since July 2020, the LSM has rebounded after months of a downturn on account of the Covid-19 pandemic, mainly in the automobile, construction, textile, food, chemicals, non-metallic mineral products and pharmaceutical sectors.

The PBS snapshot of manufacturing activity showed that seven out of 15 sub-sectors in the LSM dipped in October. High-interest rates and depreciation of the rupee will increase the cost of raw materials further and economic activities are expected to slow down during the current financial year.

Production of 11 items under the Oil Companies Advisory Committee surged by 14.75pc year-on-year in October. The 36 items under the Ministry of Industries and Production dipped by 1.21pc, while 65 items reported by the provincial bureaus of statistics fell by 4.33pc.

The LSM at 9.73pc of GDP dominates the overall manufacturing sector, accounting for 76.1pc of the sectoral share. It is followed by Small Scale Manufacturing which accounts for 2.12pc of GDP and 16.6pc sectoral share.

As per the PBS data, the entire automobile sector, excluding motorcycles, showed strong growth in October compared to the same period from a year ago. Production of tractors surged by 23.09pc, trucks by 55.48pc, buses by 25.71pc, jeep and cars by 45.12pc and LCVs by 100.98pc.

The production of motorcycles dipped by 13.18pc.

Cement output also declined by 12.57pc in October despite the fact that there is a greater demand for it following the start of construction activities and an increase in exports. The production of paints and varnishes increased by 2.72pc and cigarettes by 3.46pc. However, in the steel sector, billets and ingots posted a growth of 6.96pc.

In pharmaceuticals, the output of tablets fell by 23.13pc, injection by 36.93pc and capsules by 44.41pc. However, the output of syrups is up by 26.48pc.

On the other hand, cooking oil production posted a negative growth of 4.37pc, vegetable ghee 2.99pc. However, tea blended increased, while wheat and grain milling output up by 8.20pc.

The output of petroleum products rose by 14.75pc in October. The output of petrol and high-speed diesel was up by 16.01pc and 11.21pc, respectively, whereas furnace oil production went up by 11.09pc and kerosene by 16.85pc.

The production of LPG increased by 9.44pc, followed by jute batching oil by 54.41pc and solvent naphtha by 28.75pc.

Published in Dawn, December 17th, 2021

Source: Dawn News

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