ISLAMABAD: The Pakistan Bureau of Statistics (PBS) reported a 21.07% drop in large-scale manufacturing (LSM) in April, the ninth consecutive month of contraction.
20 of 22 sectors saw lower production. Only clothes and football increased productivity.
Moreover, Textiles, food, coke and petroleum products, chemicals, automobiles, medicines, cement, fertilisers, iron and steel, furniture, leather items, electrical equipment, and non-metallic mineral products were the main contributors to the downturn.
While, Garments grew 2.1% and football 3.45%.
Moreover, The LSM industry drives 25% of Pakistan’s GDP. The sector’s collapse is worrisome for the economy, which already faces high inflation, a growing current account deficit, and a declining rupee.
Economic instability and political turbulence caused the decline, economists said. They warned that the collapse could lead to job losses, trade deficits, and economic slowdowns.
While, The analysts claimed inconsistent rules, excessive bureaucracy, and a lack of long-term planning had hindered domestic and foreign investment in the business. Investor confidence has dropped due to economic and political turmoil, slowing manufacturing.
Energy prices, rupee devaluation, and bank funding have also hurt sector expansion. Several companies have had to cut back or close their plants, while others have reduced operations.
Pakistani manufacturing production has declined since May 2023. In July, the industry contracted 1.86%. Since then, the drop has been sequential.
Moreover, LSM growth was -25% in March 2023 and -21.07% in April. While, Industrial output fell 9.4% from July to April of the previous fiscal year. LSM output fell 9.78% in April.
Moreover, Pakistan’s manufacturing industry expanded 11.7% in FY2021-22. Global demand and beneficial government policies boosted the sector and GDP growth.
In April 2023, these sectors produced less:
Textiles—33.3%
Pharmaceuticals—32%
Food—5.9%
Non-metallic minerals—24.5%
Iron and steel—10.2%
Chemicals—7.9% (chemical products down 15.1% and fertiliser down 2.6%)
Machinery and equipment—43.3%
75.5% cars
Sugar—92.5%
Cement—23.8%
Cotton yarn—29.9%
Cotton cloth—17.5%
Petroleum products—20.4%
Computers, electronics, and optics—37.8%
Furniture—15.9%
Wood products—9.8%
Tobacco—61.6%
Rubber—13.4%
Leather—0.86%
Fabricated metal—26%
Electrical equipment—28.1% Other transport equipment—49.3%
The PBS also revealed that clothing output rose 27.36%, leather 2.15%, furniture 40.6%, and football 30.76% in July-April FY23 compared to FY22.
Moreover, In these ten months, food output fell 8.5%, beverages 3.8%, tobacco 27.45%, textiles 17.86%, wood products 64%, paper and board 7.1%, petroleum products 11.24%, chemicals 6.4%, pharmaceuticals 24.3%, rubber products 8.6%, non-metallic mineral products 11.76%, iron and steel 4.65%, fabricated metals 15%, computer, electronics, and optical products 27.65%, machinery and equipment 45.5%, electrical equipment 13%, and automobiles 45.6%.
While, In these 10 months, cement output fell 13.8%, sugar 15.4%, cotton yarn 20.5%, and cotton fabric 11.4%.
