ISLAMABAD: Large-scale manufacturing (LSM) grew 8.02 per cent in November on a year-on-year basis. Some interpret it as start of a revival in the industrial production.
With the higher-than-expected growth in LSM, the government is expected to achieve the GDP growth target of 5.7pc for 2016-17.
In July-Nov, LSM grew 3.24pc over the corresponding months of the last year, according to data released by the Pakistan Bureau of Statistics (PBS) on Thursday.
The production data of 36 items received from the Ministry of Industries and Production and that of 65 items received from the provincial bureaus of statistics contributed to LSM growth by 4.89pc and 1.11pc, respectively.
However, the production data of 11 items received from the Oil Companies Advisory Committee (OCAC) contributed negatively to LSM growth by 0.25pc in November.
Dr Ashfaque H Khan expressed doubts on the credibility of data and suspected manipulation in statistics to paint a positive picture. He called the sudden spike in LSM growth rate in November a repeat of the last fiscal year.
In the last fiscal year, Dr Khan said, industrial growth started accelerating November-onwards and reached the peak in March 2016 to achieve higher LSM growth and accomplish the revised economic growth target of 4.7pc.
“LSM has grown by over 8pc. To me it appears impossible. It does not make any economic sense,” he said.
Last year, the economist said, the base-year figure was inflated and expressed fears that LSM will record negative growth.
The official industry-specific data shows that food, beverages and tobacco recorded the highest growth of 25.46pc, followed by iron and steel products 20.64pc, engineering products 18.91pc, automobiles 11.35pc, electronics 9.82pc, non-metallic mineral products 9.51pc, pharmaceuticals 9.12pc, paper and board 6.25pc, fertilisers 4.48pc, petroleum products 3.92pc, rubber products 1.41pc, chemicals 1.37pc and textiles 0.23pc.
Other sectors that showed a decline included wood products 95.43pc and leather products 7.81pc. The LSM sector also benefitted from the continued improvement in the supply of electricity and gas coupled with the expansion in credit to the private sector. The expansion in credit to the private sector remained high due to a lower cost of credit and better market conditions. A welcome development is the rise in the net credit disbursement for fixed investment.
In the automobile sector, growth is mainly generated by the truck production, which increased 115.61pc. The production of motorcycles grew 30.09pc while that of jeeps and cars witnessed nominal growth of 1.1pc.
However, the production of light commercial vehicles (LCVs) fell 50.71pc and that of buses 24.47pc in November on a yearly basis.
In the chemical sector, caustic soda was the only segment that grew. Its annual growth remained 4.39pc. The production of sulphuric acid fell 12.8pc while that of paints and varnishes declined 3.13pc.
In the pharmaceutical group, capsules, injections, liquids/syrups and tablets recorded growth of 0.84pc, 0.21pc, 11.69pc, and 7.53pc, respectively.
In non-metallic mineral products, cement managed to grow 9.71pc in November over the preceding year. The steep fall in global coal prices helped cement manufacturers record year-on-year growth. In addition, the cement industry also benefitted through vibrant construction activities and a reduction in the policy rate.
The production of coke and petroleum products fell mainly because of diesel 60.39pc, kerosene 4.4pc, lubricating oil 19.18pc, solvent naphtha 12.14pc and petroleum products 12.61pc. In this sector, jet oil was up 0.78pc, motor spirit 4.89pc, high-speed diesel 6.88pc, furnace oil 9.3pc, jute batching oil 61.82pc and LPG 15.49pc.
Within food, beverages and tobacco, the production of vegetable ghee witnessed growth of 7.23pc, soft drinks 28.9pc, juices and other liquids 4.98pc and tea 2.6pc.
