LSM sector growth positive

Large-scale manufacturing sector achieves 4.8% growth during fiscal year 2009-10.

KARACHI: The large-scale manufacturing (LSM) sector achieved a growth of 4.8 per cent during fiscal year 2009-10 compared to the dismal performance of previous year but the growth was driven by half of the LSM sub-sectors while the other half demonstrated a negative growth.

Impressive growth was witnessed in automobiles, leather products, electronics, engineering and rubber products while food, beverages, tobacco, petroleum products and wood products were in the red during the period under review, according to the central bank’s annual report for fiscal year 2010.

The report said that LSM growth was driven mainly by domestic demand with support from macroeconomic policies.

“Overall slowdown in inflation, relatively better security situation in the country and some improvement in global demand caused production increases in consumer and export industries,” it added.

Within the automobile sector, most of the growth was observed in cars, especially of those with engine capacities above 1,000cc, as demand for newly introduced brands of two major car assemblers picked up.

Production of electronic items also remained strong as the demand for key consumer electronics like refrigerators, split air conditioners and deep freezers increased sharply, it said.

Construction rebounds, mining shrinks

The construction sector also exhibited a strong 15.3 per cent growth in the year under review as compared to a contraction of 11.2 per cent in the year before. This remarkable performance was driven mainly by a decline in building material prices, which, in turn, was caused by reduction of duty on cement sales and decline in global prices of coal, iron and wood.

The performance of the mining and quarrying sub-sector worsened as production declined by 1.7 per cent to a compound fall of 0.2 per cent. The decline was caused mainly by lower production of crude oil and coal during the year.

Published in The Express Tribune, October 26^th, 2010.