LSM sector posts 9% growth

Records decline on monthly basis due to disruptions caused by pandemic

ISLAMABAD:

Big industries posted 9% growth during the first nine months of current fiscal year but the index slid for the second successive month, suggesting an uneven growth momentum due to disruptions caused by the pandemic.

The Large-scale Manufacturing (LSM) sector registered a cumulative growth of 9% in July-March of current fiscal year, reported the Pakistan Bureau of Statistics (PBS) on Friday.

March was the second successive month when the index dropped over the previous month, again slipping below pre-Covid levels and standing at 155.6. On a month-on-month basis, the LSM sector showed a contraction of 7.7% in March over February 2021.

Out of 15 major sectors, nine sectors recorded positive growth while the output of six sectors, being monitored by the federal and provincial governments, dropped in the first nine months of current fiscal year, according to the PBS.

Read: Pakistan’s LSM sector grows 7.45%

The government had expected 2.5% contraction in the LSM sector in the current fiscal year, according to the Annual Plan 2020-21, which will now be positive at the end of the year. This will also contribute to the overall economic growth that is now projected at around 3%.

The LSM sector recorded a 22.4% year-on-year growth in March due to closure of businesses in March last year, when Pakistan had imposed lockdown after the respiratory disease started spreading.

On a year-on-year basis, the petroleum sector posted 2.8% growth in March over the same month of previous year. Provincial bureaus reported a growth of 4.2% in 11 sectors that they monitored.

The Ministry of Industries, which followed the output of about 15 sectors, reported 15.4% growth in March over the same month of preceding year.

Pakistan needs 7-9% annual economic growth to reduce poverty and unemployment and growing public debt, according to a Pakistan Institute of Development Economic study.

Data collected by the Oil Companies Advisory Committee (OCAC) showed that 11 types of industries registered average growth of just 0.7% in the first nine months of current fiscal year.

The Ministry of Industries, which monitors 15 industries, reported 6.9% growth in the LSM output. Provincial bureaus reported a growth of 1.5% in 11 sectors during the July-March period, according to the PBS.

Read more: Cement sector posts 40% sales growth

Sectors that posted growth during the July-March period included textile, which grew 5.9% and non-metallic mineral products, which registered a 24.3% growth.

The fertiliser sector grew 5.7% whereas the food, beverages and tobacco group output increased 11.7% in the nine-month period. Manufacturing of chemical products increased 11.7%, automobiles 23.4% and iron and steel 1.7%. The pharmaceutical sector registered a growth of 12.6% and output of the coke and petroleum sector increased 12.4%.

The sectors which registered a dip in their production included electronics, whose production decreased 21%, leather products, down 38%, engineering products 25.5% and wood products 45.8% during the July-March period.

Rubber production decreased 13% and paper and board production fell marginally during the nine-month period.