LAHORE: The country’s large-scale manufacturing (LSM) sector remained slow during the 11 months of fiscal year 2015 at 3.3% as compared to 4.3% in the same corresponding period of last fiscal year.
According to the data released by Pakistan Bureau of Statistics (PBS), the growth of large scale manufacturing sector, which covers 52% of Industrial sector and 10.6% of GDP, remained slow as production of food sector fell by 1.1% due to substitution of domestic production of edible cooking oil with imports and lower sugar production.
Paper & board and Textiles also underperformed due to closure of a large chipboard plant and weak exports of cotton yarn. Positively, automobile production and Iron & Steel industry witnessed healthy growth of 21.6% and 36.6%, respectively.
During May’15, LSM growth was up 5.9% YoY, thanks to Automobile, Iron & Steel, Pharmaceuticals and petroleum production. However, on month on month basis, the LSM index declined by 4.8%.
For FY15, we expect LSM growth to remain at 3.5%, lower than the Govt. target of 4.0% in FY15 and 4.0% in FY14. For FY16, LSM growth is expected to remain between 4-4.5% due to absence of negative effects of lower palm oil prices, late sugar production and closure of chipboard plant.
