Pakistan’s large-scale manufacturing (LSM) production rose 3.66pc from the prior year in the first two months (Jul-Aug) of fiscal (FY2021), according to Pakistan Bureau of Statistics (PBS) data. Recovery post-COVID-19 is in line with the rise of economic activities in Pakistan, but the pace of recovery is still weak.
In the July-Aug period, auto and iron and steel sectors recorded a decline of 18.81 and 10.39pc, respectively.
In August, LSM posted a nominal growth of 1.19pc from August last year. But production dropped by 6.78pc from July. In FY2020, LSM output fell by 10.17pc from the prior year. Major sectors like Automobile and Steel have shown a decline of 0.71 and 0.46 on a monthly basis while 0.14 and 0.46 on a yearly basis in August.
Production of 36 items under the Ministry of Industries and Production went up by 2.33pc in August, while 65 items reported by the provincial bureaus of statistics rose by 0.15pc.
| Manufacturing sector | Weight | % change 2020-2021 | YoY Change | ||
|---|---|---|---|---|---|
| Aug | Jul-Aug | Monthly | Cumulative | ||
| Automobile | 4.613 | -13.08 | -18.81 | -0.71 | -1.14 |
| Iron & Steel Products | 5.392 | -9.64 | -10.39 | -0.43 | -0.46 |
The LSM constitutes 80pc of the country’s total manufacturing and accounts for nearly 10.7pc of the national output. In comparison, the small-scale industry makes up for just 1.8pc of GDP and 13.7pc of the secondary sector.
Auto sector struggles
Pakistan’s auto demand witnessed a sharp decline in August sales, on account of multiple upward price revisions in steel prices due to currency depreciation. Recovery in rural areas boosted the sales of tractors, trucks and motorcycles post-COVID-19.
The production of tractors rose by 21.47pc, trucks up by 19.83pc and motorcycles by 8.88pc in August. On the other hand, the output of passenger vehicles dropped by jeeps and cars 29.45, buses 52.46pc and LCVs 44.68pc.
Hopes on infra projects
The production of cement rose by 16.84pc on hopes of the announcement of infrastructure projects like Naya Pakistan and housing schemes. At the same time, the production of electronic goods contracted in August due to demand slowdown of items like refrigerators, deep freezers, air-conditioners, electric bulbs, tube, fans, motors, meters, switch gears, TV sets etc.
($1=PKR167.5)