Large scale industry grows 7.45pc in February

Amid the third wave of the Covid-19 pandemic in Pakistan, the large-scale manufacturing (LSM) sector has grown 7.45% in the first eight-month (Jul-Feb) of the current fiscal year 2021, according to the Pakistan Bureau of Statistics (PBS)

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Pakistan’s Large Scale manufacturing output increased 7.45 percent for July-February 2020-21 compared to July-February 2019-20, according to the data released by the Pakistan Bureau of Statistics on Tuesday.

The output increase 4.85 percent YoY in February 2021, compared to February 2020, however, it decreased 4.15 percent, MoM, compared to January 2021. This increase compared to February 2020 can be attributed to the onset of Pandemic in February 2020 had slowed down the market.

LSM Data

 

 

The graph shows a sharp downward change in the index after February 2020 to April 2020, however, the graph shows that following April last year, the industry rebound continuing the upward trend till January 2021, the highest index since January 2019, when the second-highest 170.36 was reached.

The report then shows the sectors that have shown growth in February 2021, compared to previous periods.

The highest YoY cumulative impact on growth was shown by the Food, Beverages & Tobacco sector, with 3.32 units. This sector showed an increase in output of 15.75 percent for 8MFY21 compared to the same period 8MFY20. Similarly, YoY growth in February 2021 compared to February 2020 was 3.45 percent.

Read More: Large Scale Manufacturing output increases 9.31% YoY

The highest increase in output during 8MFY21 compared to the same period of last fiscal year was seen in Non-Metallic Mineral Products, with a 20.77 percent increase in production. The cumulative growth impact of the sector stood second to the Food, Beverages & Tobacco sector, with 2.49 units.

The highest YoY increase in output in February 2021 compared to February 2020 was seen in Coke & Petroleum Products, with a 42.66 percent increase in output. The cumulative YoY growth impact of this sector was 0.42 units.

Other sectors that saw growth were Textile, Pharmaceuticals, Chemicals, Automobiles, and Fertilizer.

On the other hand, some sectors saw a decline in growth during July-Feb 2020-21 compared to July-Feb 2019-20.

The highest YoY cumulative growth impact for the declining industry was by the Electronics sector which negatively impacted the growth by 0.89 units. Meanwhile, the percentage decrease in output for 8MFY21 was 24.36 percent compared to the same period of last year.

The highest percentage decrease in manufacturing was seen in the wood products, which saw a 51.3 percent decline in 8MFY21 compared to the same period last fiscal year. However, it must be noted that the sector saw a YoY 51.19 percent rise in manufacturing in February 2021 compared to February 2020. This sector has seen no change in growth impact.

The highest decline YoY in the month of February 2021, of 44.78 percent, was seen in Rubber Products manufacturing. The decrease in growth impact Year-on-Year was -0.05 units.

Other sectors that saw this decrease were Iron and Steel Products, Leather Products, Paper & Board Products, and lastly Engineering Products manufacturing sectors.

The data shows that 8 out of 15 sub-sectors in LSM rose during February on the back of reduced interest rates and a fall in duties of raw materials.

Large Scale Manufacturing represents nearly 80 percent of Pakistan’s total manufacturing and accounts for the 10.7 percent GDP, compared to small-scale industry contribution of 1.8 percent and 13.7 percent by the secondary sector.

According to the data released, all subsectors of the automobile industry minus trucks and buses showed massive growth Year-on-Year.

Similarly, the cement sector showed growth of 21.58 percent in 8MFY21 compared to the same period last year. Meanwhile, the sector also reported YoY growth of 11.68 percent in February 2021 compared to February 2020.

Read More: Whats wrong with Pakistan’s Growth Recipe!

Among the most significant 8MFY21 growth in large-scale industry in Pakistan is the Wheat & grain milling sector, which saw a growth of 73.31 compared to the same period last year. In February 2021, this sector’s production remained at 1,337,402 tons compared to 806,037 tons in February 2020. This increase in production should mean a higher supply of flour and low prices.

 

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