LSM growth linked to Covid success

Minister says dividend of controlling disease early paying off on economic side

ISLAMABAD:

Planning and Development Minister Asad Umar on Tuesday said the government’s success in curbing the spread of the coronavirus pandemic had contributed to the growth of the country's large-scale manufacturing sector.

“Dividend of controlling Covid early paying off on the economic side also, as V-shaped recovery gets confirmed,” he tweeted.

“Large-scale manufacturing numbers for July show more than 9% growth over June and more than 5% growth vs July 2019,” he added.

Large-scale manufacturing industries’ production grew by 5.02% on year-on-year basis during the first month of current fiscal year as compared to the corresponding period last year, according to the Pakistan Bureau of Statistics (PBS).

LSM industries’ quantum index number (QIN) was recorded at 134.14 points during July 2020 against 127.73 points during July 2019.

The highest increase of 2.25% was witnessed in the indices monitored by the industries and production ministry, followed by 1.77% increase in the indices monitored by the Provincial Board of Statistics and 1% increase in the products monitored by the Oil Companies Advisory Committee.

On a month-on-month basis, industrial growth witnessed an increase of 9.54% in July this when compared with the indices of June 2020, the PBS data shows.

The major sectors that showed growth during July 2020 included textile (1.66%), food, beverages and tobacco (21.73%), coke and petroleum products (18.34%), pharmaceuticals (19.20%), chemicals (0.19%), non-metallic mineral products (29.01%) and paper and board (5.04%).

The LSM industries that witnessed negative growth, included automobile (23.31%), iron and steel products (11.13%), fertilisers (5.06%), electronics (33.31%), leather products (35.95%), engineering products (32.60%), rubber products (15%) and wood products (18.63).

For the second year in a row, Pakistan’s large-scale industrial sector shrank by 10.2% in the previous fiscal year, which was steeper than the post-Covid-19 estimate of the government.

The contraction was sharper than the estimate of the finance ministry, which had projected a negative 7.8% growth in the LSM sector in the aftermath of coronavirus.

On the basis of negative 7.8% growth, the ministry had estimated an overall contraction of 0.4% in the economy in the last fiscal year that ended in June.

It was the second consecutive year when the LSM sector shrank, which was also the main contributor to employment generation after the agriculture sector. In fiscal year 2018-19, the LSM sector had contracted 2.6%.

The business community has underscored the need for a review of economic policies keeping in view that the drop in the large-scale manufacturing output in the first 11 months of fiscal year 2019-20.

In a statement, All Pakistan Business Forum President Syed Maaz Mahmood said that the large industrial sector, which had been shrinking even before the deadly pandemic hit the economy, contracted further during this period.

(With input from APP)