Large scale manufacturing grows marginally
The provisional estimates of Federal Bureau of Statistics released on Tuesday showed that the LSM grew 1.14 per cent during the last financial year, ended on June 30. The figure is higher than the estimates of the Finance Ministry that had projected 0.98 per cent LSM growth in Economic Survey of Pakistan.
The provisional data is computed on the basis of output of 100 industries monitored by the Oil Companies Advisory Committee, Ministry of Industries and Provisional Bureau of Statistics. Out of those, 48 industries registered negative growth and 52 industries showed positive growth.
According to the FBS, the data compiled by the four provincial bureaus of statistics showed that 24 industries saw a massive dip in production. This resulted into slightly over two per cent negative growth during the last financial year The Oil Companies Advisory Committee data showed that the oil and gas sectors production also dipped 2.3 per cent last year. The Ministry of Industries and Production data depicted growth of 3.6 per cent that pushed the overall LSM growth to positive zone last year.
Due to higher than the estimated output the overall economic growth rate for the last fiscal year will slightly be upward revised. Against the earlier estimates of 2.4 per cent the national output rate may now remain around 2.5 per cent, said an official of the Economic Advisory wing of the Finance Ministry. However, final economic growth number will be firmed by the National Accounts Committee that usually meets to review growth numbers in May.
According to the official documents, slower industrial growth is because of the fact that the LSM was hit by power outages and lower domestic demand.
The latest statistics also forecast a gloomy picture for the new financial year. According to the FBS, in June the large scale manufacturing quantum decelerated almost three per cent over the corresponding month of the last year. It also gives an indication that the energy shortage will continue to hurt large scale industries in the new financial year. For this year the government has projected a nominal two per cent growth in the large industries.
The Economic Advisory wing official said that an almost one-fifth decline in Pakistan Steel Mills production in June also hurt growth sentiments.
On monthly basis sugar production dropped 21.4 per cent, jute goods decelerated almost nine per cent and billets and ingots almost one-fourth.
Published in The Express Tribune, August 17th, 2011.
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@Sajida: Against your old report from 2005, I am giving you the link for May 2011, which lists only the upcoming thermal projects in India. It seems there are hundreds of projects getting developed there. Compare this with our performance and you tell me? Let us focus on our failing state than looking outside and feel good. http://thermalpower.industry-focus.net/index.php/industry-overview/342-list-of-upcoming-thermal-plants-in-india.html
@Sajida
It has started in Pakistan too. Since Pakistan is too much reliant on textile industry the factories are moving to Bangladesh since textile is not China's cup of tea and Bangladesh is much cheaper.
As for your links, the first one just says multinational companies based in India are opening branches in China. They are not just manufacturing companies but there are also banking, finance, logistics, supply-chain and agriculture companies. Similarly big Chinese companies like Huawei and Lenovo have opened manufacturing bases in India. The biggest R&D center of Huawei outside China is in Bangalore, India.
And your second link of Tehelka is about rural Uttar Pradesh which is probably the most impoverished area of India. The power politics of that province have been deliberately keeping people from developing for many decades now. There has been mass migration of UP people to other parts of India.
@Sajida: .. stop looking at India and lets look at whats happening here. Whats the point reporting some 5-6 year old story of power shortage in India? Have you any idea of what India has done in last 5 years? they have ADDED 40,000 MW !! And they are implementing another 75,000 MW in next 6-7 years many of which are in advanced stage. Major % of new additions will be from nuclear and renewable clean energy. We are not even peanuts when compared against giants like India and China. So lets not site a 5-6 year old article and feel good about it. The topic is whether we trust the index published by Pak Govt or not... and I believe none of us trust any reports from pak any more.
It is not unexpected that power problems dampened this sector. In sector some manufacturers are decamping to China. I am surprised this hasn't started in Pakistan yet! "Indian companies are looking at the Chinese mainland and Hong Kong not only as manufacturing platforms, but also sourcing hubs." http://info.hktdc.com/imn/06121903/markettrends156.htm Indian companies move to new levels via HK, Chinese mainland ""“For 14 to 16 hours a day, there is no power, what am I meant to do?” Ashok Gupta, owner of Benaras Beads, the country’s market leader in the trade, has exhaled his exasperations too long. “In sentimental old ways I love Benaras and I am too old to leave, but I can’t say the same for my trade.” He’s relocating manufacturing to China, his son’s in some unpronounceable Chinese city, setting up shop. “They give you a complete factory floor in a week, here I haven’t been able to get six hours’ power supply in 50 years, how long can I last on generators?”" http://www.tehelka.com/story_main34.asp?filename=Bu150907EVERYONEE.asp Everyone Who Can, Is Leaving The retail bustle of Benaras can be misleading. Behind the diesel-fed dazzle, is an economy wheezing to death, says Sankarshan Thakur
when we corrupt immoral pakistanis can fudge revenue numbers and FBR can shamelessly lie to external donors to beg other country's hard earned tax money, then I dont trust a single digit or index produced by this govt or by its establishments. A bunch of corrupt jokers who sell national assets to US and Chinese, lie to citizens and international community at every instance deserves no trust. Shame on our system.
I have serious reservations about the index numbers used. I don't know what the weights are when they were last up-dated and how they incorporate new products.
The usual index number problem.
The large-scale manufacturing sector is well-placed to get around the power shortage issue. It is costly but they manage. I worry more about the SME sector -- the back-bone of manufacturing output, employment and exports.