ISLAMABAD: The upward trend for industrial output continued for the second consecutive month of the current fiscal year, with Large-Scale Manufacturing (LSM) posting a growth of 12.74 per cent in August, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.
The latest PBS data reflected an upward reversal of growth in industrial output. The higher growth trend in August by entering into a double-digit is an indication that growth will continue in the coming months. The improvement in output will support the government’s claim that the target of 4.8pc for the current fiscal year will be achieved.
The World Bank has projected 3.5pc GDP growth for the current fiscal year recently. However, this was rejected by the Ministry of Finance which claimed to cross its projected target on the plea that industrial output will remain in double-digit.
LSM expansion had slowed in July in the first month of the current fiscal year after posting a double-digit growth since November 2020 on the back of higher automobile and cement production and one-time sugar output which reflects the revival of industrialisation.
Low interest rates, reduction in duties on raw materials expected to further spur economic activities
On a month-on-month basis, the big industry production increased by 2.09pc. Between July and August, LSM grew by 7.26 pc.
In the outgoing financial year, LSM showed the highest growth of 14.85pc and the government claimed that slums in industrial production has come to an end.
Since July 2020, LSM has rebounded after suffering months of a downturn on account of the Covid-19 pandemic, mainly in the automobile, construction, textile, food, chemicals, non-metallic mineral products and pharmaceutical sectors.
The PBS snapshot of manufacturing activity showed that 12 out of 15 sub-sectors in LSM rose in August. Low interest rates and reduction in duties on raw materials are expected to further spur economic activities during the current financial year.
Increase in production was witnessed for textile, pharmaceuticals, chemicals, automobiles, iron and steel products. However, production decline was seen in fertiliser, electronics and rubber products.
Sector-wise, production of 11 items under the Oil Companies Advisory Committee increased by 8.83pc year-on-year in August. The 36 items under the Ministry of Industries and Production rose by 12.61pc, while 65 items reported by the provincial bureaus of statistics were up by 13.82pc.
The LSM at 9.73pc of GDP dominates the overall manufacturing sector, accounting for 76.1pc of the sectoral share. It is followed by Small Scale Manufacturing which accounts for 2.12pc of total GDP and 16.6pc sectoral share.
As per the PBS data, the entire automobile sector showed strong growth in August 2021 compared to the same period from a year ago. Production of tractors rose by 38.99pc, trucks by 79.58pc, jeep and cars by 139.86pc, LCVs by 103.25pc, buses 44.83pc and motorcycles by 5.59pc in August.
Cement output also surged by 22.76pc in August owing to the fact that there is a greater demand following the start of construction activities and increase in exports. In the steel sector, billets and ingots also posted a growth of 20.29pc.
The production of paints and varnishes declined by 3.32pc. However, production of cigarettes up by 33.77pc.
In pharmaceuticals, the output of tablets dipped by 19.43pc, injection by 21.46pc, and capsules by 17.21pc. However, the output of syrups is up by 155.85pc.
On the other hand, cooking oil production rebounded and posted a growth of 10.47pc and tea blended by 20.66pc. However, vegetable ghee production fell by 3.48pc. However, wheat and grain milling output increased by 21.17pc.
The PBS data for August showed that output of petroleum products increased by 8.83pc across the board. The output of two oil products — petrol and high-speed diesel — was up by 16.77pc and 3.15pc, respectively.