Large-scale manufacturing at highest in five months

Increase comes on back of robust production by selective industries

KARACHI: The overall large-scale manufacturing sector has delivered a five-month high output in October on the back of robust production by selective industries including fertiliser, cement, automobile, food and beverages and chemicals.

The Provisional Quantum Indices of Large Scale Manufacturing Industries surged to a five-month peak of 140.90 points in October 2018, the Pakistan Bureau of Statistics (PBS) reported on Tuesday.

The index showed 0.95% growth compared to October 2017 and 5.33% improvement compared to September 2018.  The fertiliser sector acted as the engine of growth for the overall industrial sector in the month under review.

Other industries, which displayed better performance in the month, include food, beverages and tobacco, chemicals, non-metallic mineral products (cement and glass plates and sheets), automobile, engineering products and rubber products, according to the PBS.

On the other hand, the pharmaceutical industry exhibited the worst performance in the month, followed by coke and petroleum products and iron and steel products. Electronics, leather products, paper and board industries also showcased a drop in production during the time period. Textile, the single largest export industry, exhibited flat perfor
mance on the index.

LSM drops in 4-month period

However, the Provisional Quantum Indices of Large Scale Manufacturing Industries dropped 0.65% in the first four months (July-October 2018) of the current fiscal year to 135.25 points compared to 136.13 points in the same period last year, PBS said.

“Production in Jul-Oct 201819 as compared to Jul-Oct 2017-18 has significantly decreased in pharmaceuticals, coke and petroleum products, iron and steel products and electronics while it increased in non-metallic mineral products, fertilisers and paper and board,” the PBS added in a short commentary.

Arif Habib Limited Head of Research Samiullah Tariq said that excessive production of furnace oil at refineries subdued the overall industrial sector performance. He, however, hoped the furnace oil issue would resolve in the time to come after the government took some corrective measures including permitting refineries to export the surplus production.

“Growth in power production indicates that large scale manufacturing sector would manage to deliver better performance in the coming months,” he said. “The full fiscal year 2019 production, however, will remain notably low to be compared to the previous year FY18.”

He said the massive rupee depreciation of around 32% against the US dollar in the last 12 months may impact production of cars in the future.

While, heavy subsidiaries and support package for the textile industries should result into reviving the industry in the time to come, he said.