LSM grew 2.6pc in July ISLAMABAD: Large-scale manufacturing (LSM) grew merely 2.62 per cent year-on-year in the first month of 2016-17, according to data released by the Pakistan Bureau of Statistics on Wednesday.
Lower-than-expected growth in the LSM shows the government may also miss the target for GDP for the current fiscal year. The LSM grew 3.21pc in 2015-16.
Production data of 36 items received from the Ministry of Industries contributed 1.52pc to LSM growth in July. The contribution of 65 items received from the provincial bureaus of statistics remained 1pc. Production data of 11 items received from the Oil Companies Advisory Committee (OCAC) contributed 0.1pc to LSM growth in July.
Industry-specific data shows that paper and board recorded the highest growth of 33.14pc, followed by iron and steel products (19.02pc), non-metallic mineral products (12.68pc), pharmaceuticals (6.94pc), rubber products (6.27pc), electronics (4.83pc), fertilisers (0.96pc) and automobiles (0.90pc).
Sectors that showed decline during the month under review are wood products (97.72pc), engineering products (21.58pc), chemicals (4.10pc), food, beverages and tobacco (2.92pc), coke and petroleum products (1.20pc), leather products (0.96pc) and textiles (0.10pc).
The LSM sector also benefitted from the continued improvement in the supply of electricity and gas coupled with an 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. Another welcome development is the rise in the net credit disbursement for fixed investment.
In the automobile sector, the production of light commercial vehicles (LCVs) decreased year-on-year by 35.18pc, jeeps and cars (4.02pc) and tractors (24.04pc) during the month under review. However, the production of trucks (58.51pc), buses (85.48pc) and motorcycles (9.37pc) went up on an annual basis.
The chemical sector also witnessed negative growth during the first month of the current fiscal year mainly because of a decline in sulphuric acid (11.55pc), paints and varnishes-small (2.38pc) and caustic soda (22.77pc).
In the pharmaceutical segment, capsules, injections, liquids/syrups and tablets recorded growth of 11.26pc, 17.72pc, 9.88pc and 1.52pc, respectively.
In non-metallic mineral products, cement grew by 12.37pc in July compared to a year ago. The steep fall in global coal prices has helped cement manufacturers increase production. In addition, the cement industry also benefitted from vibrant construction activities and a reduction in the benchmark interest rate.