Pakistan’s large-scale manufacturing (LSM) output dipped 10.17pc in 2019-20, according to data released by the Pakistan Bureau of Statistics (PBS) on Wednesday. However, in the coming months, large scale manufacturing output is likely to increase in line with a revival in economic activities. Pakistan’s government has lowered interest rates to increase cash flows and lowered duties on raw materials that could spur economic activities hampered by COVID-19 lockdowns.
The drop in large industry outputs has decelerated since May. In June, the LSM index rose 16.81pc from May. The LSM in June was, however, still down 7.74pc on an yearly comparison. In May 2020, the LSM output had tumbled 24.8pc from the prior year of May.
In FY 2020, the depreciation of Pakistani currency and less supportive monetary policies before the COVID-19 outbreak had impacted the LSM output. The iron and steel sector witnessed a contraction in the overall manufacturing.
In Pakistan, out of total manufacturing, the LSM constitutes 80pc share. On the other hand, the small-scale industry makes up just 1.8pc of the GDP while secondary sector makes up 13.7pc share.
For the FY20, the government has projected a targeted growth of 3.1pc. In the FY19, the large-scale industry had declined 3.64pc versus a target growth of 8.1pc.
As per the statistics, the auto sector saw the production of tractors sales plunging 34.66pc, while that of trucks 51.2pc from prior year. The production of buses plunged by 41.73pc, while that of jeeps and cars by 54.84pc, LCVs by 50.65pc, and motorcycles by 23.51pc.
In June, production of tractors and motorcycles revived owing to improvement in sales and is expected to post higher results in H2.