Eight sectors of large scale manufacturing (LSM) recorded double-digit growth, ranging from 10 percent to 89 percent, during the month of June 2021 on a year-on-year (YoY) basis.
According to the data released by Pakistan Bureau of Statics (PBS), the sectors including automobile, petroleum, iron, mineral, chemicals, textile, pharmaceutical and fertiliser recorded a surge of 89 percent, 39 percent, 33 percent, 33 percent, 24 percent, 12 percent, 11 percent, and 10 percent, respectively, during June 2021 as compared to June 2020.
Overall during the fiscal year 2020-21, automobile, mineral, chemicals, petroleum, iron, pharma, textile and food sectors were the major sectors with increased output levels of 51 percent, 27 percent, 19 percent, 18 percent, 16 percent, 15 percent,12 percent, and 11 percent, respectively, as compared to the fiscal year 2019-2020 LSMI levels.
Overall in the month of June 2021, LSMI increased by four percent on a month-on-month basis and 18 percent on a year-on-year basis. Cumulatively, during the fiscal year 2020-21, most of the major categories of LSM witnessed strong growth mainly attributable to low base effect and high growth fiscal incentives given to the manufacturing sector.
The textile sector which has the most weight in the index contributed significantly during FY21 largely on the back of robust international demand complemented with favourable government policies to boost exports. Automobile production witnessed the highest growth of 51 percent YoY in FY 21 compared to the negative growth of 44.6 percent YoY in FY 20, mainly due to increased production of jeeps & cars, trucks, tractors, and LCVs amid favourable macroeconomic indicators and low-interest-rate environment which amplified auto financing during FY21.
The improvement in fertiliser production during the period under review was accredited to an increase in urea production courtesy commencement of LNG plants operations.
Meanwhile, the sectors which witnessed deterioration during the year were the ones with significantly lower weight in the LSM index, such as wood, leather, engineering, and rubber products with a decline in output of 39 percent, 26 percent,15.4 percent, and 15 percent, respectively, on a year-on-year basis.
Earlier, Advisor to Prime Minister on Commerce and Investment Abdul Razak Dawood announced on Monday that the large-scale manufacturing (LSM) sector has grown at a 16 years high level of 14.85 percent in the fiscal year 2021.
In a tweet, Razak Dawood said: “I am glad to share that the LSM sector grew at a 16 years high level of 14.85pc in FY 21. The de-industrialisation that was taking place in Pakistan has now been reversed and this has been made possible by the government’s pro-industry policies.” The growth was led by textiles, food, beverages, tobacco, petroleum, pharmaceutical, chemical, mineral, automobile, fertilisers and iron & steel products, he added.