LSM posted negative growth in July 2022 after Oct 2020

ISLAMABAD: As was expected following unabated devaluation of rupee, hike in interest rate, historic rise in inflation and government’s initiatives to control imports, the Large Scale Manufacturing Industries (LSMI) has posted a negative growth of 16.5 percent on a month-on-month (MoM) in July 2022 as compared with the growth of June 2022, data released by Pakistan Bureau of Statistics (PBS) on Thursday showed.

The LSM growth in July 2022 was declined by 1.4 percent year-on-year (YoY) if compared with the growth registered in the corresponding month of 2021.

As per the LSM index developed with base year 2015-16, the LSM commutative growth has posted negative after almost 21 months as it was last posted -1.4 percent in October 2020 after the outbreak of Coronavirus in the country. The LSM growth remained negative from September 2019 to October 2020 for hampering the economic activities after COVID-19.

In Pakistan, LSM contributed 9.2 percent to GDP in FY22. It dominates the overall manufacturing sector, accounting for 74.3 percent of the sectoral share followed by small-scale manufacturing, which accounts for 2.0 percent of total GDP and 15.9 percent sectoral share.

According to the Provisional Quantum Index Numbers of Large Scale Manufacturing Industries (QIM) the QIM estimated for July 2022 is 110.5 index compared to 112 for July 2021 and 132.3 for June 2022.

The LSM data with the base year 2015-16 showed that the main contributors to the overall growth of -1.4 percent are, garments (4.4), iron & steel products (0.6) furniture (2.2), chemical products (0.6), cigarettes (-1.7), cement (-2.8) and fertilizers (-0.7).

The production in July 2022 as compared to July 2021 has increased in wearing apparel, paper & board, iron & steel products, and furniture while it decreased in food, textile, tobacco, fertilizers, pharmaceuticals, non-metallic mineral products, and automobiles.

The sectors showing growth during July 2022 compared to July 2021 include beverages (0.02 percent), wearing apparel (4.4 percent), leather products (0.1 percent), wood products (0), paper & board (0.5 percent), iron & steel products (0.6 percent), furniture (2.2 percent) and other manufacturing (football) (0.1 percent).

The sectors showing decline during July 2022 compared to July 2021 include food (1.2 percent), tobacco (1.7 percent), textile (0.5 percent), coke & petroleum products (0.4 percent), chemicals (0.1 percent), chemicals products (+0.6 percent) and fertilizers (0.7 percent), pharmaceuticals (2.2 percent), rubber products (0 percent), non-metallic mineral products (2.4 percent), fabricated metal (0.1 percent), computer, electronics and optical products (0 percent), electrical equipment (0.1 percent), machinery and equipment (0.3 percent), automobiles (0.3 percent) and other transport equipment (0.2 percent).

 

Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

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