Nothing less than a miracle would dramatically change the manufacturing sector’s fortunes in the current election year after the challenging 2022 that saw temporary closures, deferments of expansion plans and scaling down of production by multiple businesses.

Risks are higher for energy-intensive, import-reliant units, but prospects are relatively brighter for fast-moving consumer goods providers and high-tech manufacturers. The situation may aggravate further for cement, fertiliser, textile, chemicals, steel, petroleum refining, auto and pharma industries, at least in the first half of 2023.

The high-tech goods manufacturers (defence equipment, electronic goods, mobile phones), FMCGs and labour-intensive consumer goods manufacturers may bode better next year. Some companies may benefit from rising prices, but generally, profitability might be squeezed over the year for the industry. Big businesses with captive power plants and greener energy solutions are expected to fare better. The business-to-business demand would be weaker than the business-to-consumer demand.

Veiling their disgust towards policymakers, top business leaders plead for supportive interventions by the government and flexibility by International Monetary Fund (IMF) to steer the economy towards sustainability and growth. They are not expecting a turnaround but foresee conditions improving in the second half of the year.

Muhammad Ali Tabba, CEO, Lucky Cement, who leads the business community from many forums, probably agrees but adopts a milder tone. “It all depends on the political situation. Overall, it will be a rough ride due to uncertain economic conditions.”

Another long-time champion of the industry, CEO, the Pakistan Business Council, Ehsan Malik, shared his views in detail. He expressed frustration with politicians and feared the dangerous fallouts of the repetition of flawed, tried, tested and failed policies.

“None of the political parties have credible plans to restore economic stability or solvency. They seem to be obsessed with retaining or regaining power. Pakistan needs the painful but essential adjustments prescribed by the IMF.”

M Abdul Aleem, Secretary General of the Overseas Investors Chamber of Commerce and Industry, was sceptical. “Many manufacturing units are struggling to work at normal capacity due to demand slump and non-availability of imported spare parts and raw material. The foreign investment in the last five months is barely $49 million, the lowest in the past ten years. Next year’s growth is projected to be lower than the current year’s 2pc.

“Despite dark cloud on the horizon, there is hope that the dismal economic landscape may change in 2023 with political stability post-elections followed by an all-inclusive comprehensive and mid-term economic recovery plan, duly supported by internal stakeholders and external agencies like IMF.”

Dr Usama Ehsan Khan, an economist at the Federation of Pakistan Chamber of Commerce and Industry’s Policy Advisory Board, predicts further manufacturing shrinkage in 2023. “The Quantum Index of Manufacturing (QIM) of the Pakistan Bureau of Statistics (PBS) has posted a declining trend since March 2022.

“Recently, the non-issuance of the letters of credit has been impeding the industrial sector as, on average, almost 50-60pc of the inputs are being imported. In addition, persistent gas shortages and multiple rounds of increases in energy tariffs hit export competitiveness hard.”

Mashood Ali khan, an automotive expert and former president of the Pakistan association of automotive parts and accessories manufacturers, was not hopeful. “Honestly, the next year will not be favourable for the auto sector. Prices will increase steeply along with the policy rate, and government policies may get more stringent. Political instability will dissuade new investment.” He urged policymakers to engage automakers to formulate a revival plan for the next three years.

Moin Fudda, the chairman board of directors of the Central Depository Company, predicted a further slowdown in the manufacturing sector during the year. “In the first half of 2023, large-scale manufacturing numbers will be low month by month. However, in the second half, when the gas supply gets better, there may be some stability, but overall, growth is expected to be under 3pc.