Manufacturing is expected to grow by an anaemic 3% in the fiscal year 2011, though some leading indicators suggest that the sector may expand more rapidly next year, should the government be able to resolve the chronic power shortages that have crippled the sector for the last three years.
Large-scale manufacturing is expected to grow by an even smaller 1%. Yet perhaps more encouragingly, small-scale manufacturing grew by a healthy 7.5%, which suggests that less power-intensive manufacturing is still a profitable enterprise, although it also serves to highlight the degree to which electricity outages have been hampering growth in manufacturing.
There are some bright spots within large-scale manufacturing as well. Food and beverage production, the second largest manufacturing industry behind textiles, grew by a healthy 9.3% during the first nine months of the fiscal year, suggesting that the boom in agricultural commodity prices has resulted in substantial gains for the agro-industry.
The automobile manufacturing sector grew by a substantial 14.6% during the first nine months of the current year, a stellar year that follows an even better record of 30% growth last year. Leather has had a similar run, growing 23.6% last year and 30% in the first nine months of fiscal year 2011.
Meanwhile, leading indicators suggest that textile manufacturing may stage a comeback next year, compared to the negligible 0.2% growth expected this year. Imports of capital machinery, a key indicator of investment in the textile sector, have expanded 82.5% during the first nine months of fiscal year 2011.
Published in The Express Tribune, June 3rd, 2011.
The full text of The Economic Survey 2010-2011 can be viewed here.
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