According to data released by the Pakistan Bureau of Statistics (PBS) on Thursday, large-scale manufacturing (LSM) shrank 7.75 percent from the previous year in October, with declines seen in the textile, machinery and equipment, and vehicle sectors.
Compared to August, the LSM posted an annual increase of 0.1 percent in September, according to government figures. That represented a significant improvement over July, when the LSM dropped by 1.4 percent annually.
Nevertheless, experts had expressed worries about a downturn in the economy brought on by record energy and raw material costs.
“Facing a balance of payments challenge, the authorities have taken a number of measures to slow down the economy. These include tightening of monetary policy as well as administrative measures to curtail imports. These measures coupled with challenges of floods, energy shortfalls and a slowing global economy have resulted in contraction of the LSM output,” said Dr Khaqan Najeeb while commenting on the figures.
The economic decline has been extremely noticeable, Najeeb remarked, despite the fact that it is vital to stabilise the economy.
“It is important to ease the severe dollar liquidity crunch by increasing inflows and maintain a realistic exchange rate so that manufacturing is not disincentivised,” he added.
Automobiles (down 30.56%), textile (down 24.62%), machinery and equipment (down 38.01%), wood products (down 81.75%), computer, electronics, and optical products (down 25.66%), and medicines were the main causes of the YoY fall (18.56pc).
On the other side, the furniture industry expanded by 105.41 percent, followed by football (up 65.46 percent) and clothing (34.14pc).
According to PBS data, LSM decreased by 3.62 percent in October compared to the month before.
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“The production in July-October 2022-23 as compared to July-October 2021-22 has increased in wearing apparel and furniture while it decreased in food, tobacco, textile, coke & petroleum products, pharmaceuticals, rubber products, non-metallic mineral products, fabricated metal, electrical equipment, machinery and equipment, automobiles and other transport equipment,” said the PBS.
When manufacturing activity increased by only 0.2 percent in June compared to the prior month, the decline had already begun.
Large-scale manufacturing increased 11.7 percent year over year in the preceding fiscal year.
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