LAHORE: The country’s manufacturing sector recorded a value of 64.76, a minor decline from July’s 65.69.
This was revealed by the MCB Bank Purchasing Managers Index (PMI). The survey says that at present, the risks to the manufacturing sector appear to be finely balanced with Large-Scale Manufacturing (LSM) increasing on a year-on-year basis (4.67 percent YoY in July 2015 according to Pakistan Bureau of Statistics) but at a very sluggish pace.
Access to cheaper raw materials in the local market on account of declining inflation, which hit its 12-year low in September at 1.32 percent and an expected increase in credit-uptake with interest rates at 42-year lows, will help manufacturers, and boost overall economic growth.
At the same time, however, declining commodity prices and stagnating demand in the international market has squelched the penchant for and profitability of export production, with exports falling as much as much 14 percent YoY in the first quarter of this fiscal year, according to the Pakistan Bureau of Statistics.
The September MCB Bank PMI indicates that manufacturing activity continued to grow, although, its pace slowed down as compared to July. New orders increased at a slowing pace in September, registering an index value of 75.3, compared to 76.3 in July, while production level dropped 3.1 points to 67.5. Both sales and production levels dropped, inventories expanded at an increasing rate from July’s reading of 59.4 to 64.7, suggesting an overall increase in build-up of inventories.
