The Pakistan Bureau of Statistics (PBS) released a report stating that the country’s Large Scale Manufacturing Industries (LSMI) production witnessed a significant decline of 21.07pct YoY in April 2023. The production index stood at 104.65, compared to 132.60 in April 2022. Moreover, on a month-on-month basis, the LSMI growth recorded a decrease of 9.78pct from 115.99 in March 2023.
Cumulatively, during the first ten months of the fiscal year 2022-23 (10MFY23), the LSMI contracted by 9.39pct YoY, reaching 115.46 compared to 127.43 in the same period of the previous fiscal year.
Notably, several sectors experienced declines during the July-April period of 2022-23 compared to the corresponding period of 2021-22. These sectors include steel (-4.65pct YoY), fabricated metal (-15.12pct YoY), electrical equipment (-13pct YoY), machinery (-45.48pct YoY), and automobiles (-45.58pct YoY).
In the steel sector, billet production suffered a 15pct YoY decline, totaling 4.54 mln tons during the July-April 2022 period. Cold rolled steel output decreased slightly to 3.01 mln tons, compared to 2.93 mln tons in the same period of the previous year.
In April 2023, billet output plummeted by nearly 26pct YoY to 400,000 tons. However, cold rolled steel production experienced a slight increase of 0.23pct YoY, reaching 300,900 tons.
The negative growth in LSMI output can be attributed to various factors, including weak macroeconomic indicators, monetary tightening measures, supply chain disruptions, and rising energy costs. Political instability in the country has further exacerbated the challenges faced by the sector, contributing to the decline in production.
