In May, Pakistan’s Large-Scale Manufacturing (LSM) sector recorded a significant year-on-year contraction of 14.37 percent.
According to data released by the Pakistan Bureau of Statistics, this marks the ninth consecutive month of decline for the country’s major industries during the ongoing fiscal year.
The primary reason behind this contraction can be attributed to a slowdown in the production of export-oriented textile and clothing sectors.
The repercussions of this downturn in the large industries are evident in the form of a substantial number of job losses. The reduction in production capacity has unfortunately resulted in many individuals becoming unemployed.
These statistics highlight the challenges faced by Pakistan’s manufacturing sector and raise concerns about the overall economic performance of the country in the coming months.
The LSM’s decline in May is part of a continuing trend. In April, the decline was 21 percent, which is lower than the decline of 25 percent in March, 11.6 percent in February, and 7.9 percent in January. In December 2022, there was a small decrease of 3.51 percent.
The negative growth in LSM has persisted throughout the fiscal year. From July to May, the sector posted a year-on-year negative growth of 9.87 percent. This is in contrast to the expansion of 11.7 percent recorded in the previous fiscal year, FY22. The production estimates for LSM industries are based on the new base year of 2015-16.
In May, the production of 16 sectors experienced a decline, while only four sectors reported a marginal rise. The textile sector witnessed a significant decline of 25.97 percent compared to the same period last year. The major contributors to this negative growth were yarn (29.89 percent) and cloth (17.49 percent).
The garments sector, on the other hand, posted a growth of 12.86 percent in May, maintaining a positive performance throughout the first 10 months of the fiscal year, except for a negative growth in February.