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Big industry grows 0.6pc in August

By Mubarak Zeb Khan 2022-10-20
ISLAMABAD: Large-scale manufacturing (LSM) swung to growth in August, posting an annual increase of 0.6 per cent and 3.9pc compared to July, official data showed on Wednesday, suggesting the economy has slightly revived.

That was quite an improvement from July, when the LSM shrank 1.4pc year-on-year and 16pc month-onmonth. Economists have already raised concerns about an economic slowdown caused by record energy and raw material prices.

The combined figure for July and August the first two months of the fiscal year showed large-scale manufacturing dipped 0.4pc compared to the same period a year ago.

The main contributors to the slowdown were garments (down 5.3pc), cement (2pc), petroleum products (1.2pc), fertilisers (0.2pc), and iron and steel products (0.5pc), according to data released by the Pakistan Bureau of Statistics.

The slowdown started in June when manufacturing activity grew only 0.2pc compared to the previous month.

In the previous fiscal year, large-scale manufacturing grew 11.7pc year-on-year. The production estimate for LSM industries was made using the new base year of 2015-16.

The LSM slowdown in August also appeared to be broad-based, with 15 out of 22 sectors witnessing negative growth only seven sectors posted paltry growth.

During the 2021-22 fiscal year, the large-scale manufacturing sector, which accounts for 9.2pc of GDP, dominated the overall manufacturing sector with 74.3pc of the sectoral share, followed by a 15.9pc share of smallscale manufacturing, or 2pc of GDP.

In August, the textile sector shifted into reverse, shrinking by 3.7pc over a year ago. Major negative growth originated from knitting wool (down 100pc) and woollen blankets (down 64.3pc). No growth was reported in the production of yarn and cloth.

In contrast, the production of garments jumped 61pc during the month, driven by higher demand.

In the food group, wheat and rice production dipped by 11.6pc and blended tea by 42.5pc.

Petroleum products posted a negative growth of 16pc in August, with almost all petroleum products recording slowdown.

The auto sector also saw a 20pc slump, as the production of almost all kinds of vehicles went down, except for buses and jeeps.

The product of iron and steel jumped 10.3pc during the month, whereas that of non-metallic mineral products dipped 6pc.

However, chemical products showed growth of 11.6pc, led by higher production of sulphuric acid, hydrochloric acid, soda ash and toilet soap.