According to the data released by the Pakistan Bureau of Statistics (PBS) Large-scale manufacturing (LSM) slipped for the sixth consecutive month in December, shrinking 3.51% year-on-year (YoY).
The industrial output has largely been declining since the start of the current fiscal year, with only a minimal rise recorded in August. Negative growth of 5.49% was recorded in November, 7.7% in October, and 2.27% in September on a year-on-year basis.
Moreover, the YoY decline in December was led by the textile sector, which dropped by 21.24%, followed by automobiles at 36.22%, pharmaceuticals up to 12.72%, iron and steel products at 8.12%, and chemicals declined by 3.82%.
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However, the furniture sector showed a growth of 182.35%. Likewise, wearing apparel has also shown the progress of 25.5% and the food industry has grown by 11.05%. This has increased the LSM by 12.38% on a month-on-month basis.
The PBS data showed that in the first half of the current fiscal year, LSM declined by 3.68% compared to July-December 2021.
The official statement suggested;
“The production in July-December 2022-23 as compared to July-December 2021-22 has increased in wearing apparel, leather products, furniture, and other manufacturing (football) while it decreased in food, tobacco, textile, coke, and petroleum products, pharmaceuticals, rubber products, non-metallic mineral products, fabricated metal, electrical equipment, machinery and equipment, automobiles and other transport equipment”.
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Furthermore, the decline in large-scale manufacturing comes amid the government’s ban on imports until a $ 7 billion bailout is agreed upon with the International Monetary Fund (IMF). The import ban is imposed due to declining foreign exchange reserves, rupee devaluation, and record high inflation which is expected to increase up to 33%.
Additionally, the shortage of raw materials and rising fuel costs have also impaired manufacturing industries in Pakistan. Industries such as steel, textiles, and pharmaceuticals are barely functioning, forcing thousands of factories to close and increasing unemployment.