Big industry output narrows 3.8% in November 2024

January 15, 2025 (MLN): The large-scale manufacturing (LSM) sector of Pakistan recorded a decline of 3.8% in November 2024 compared to last year, the Pakistan Bureau of Statistics (PBS) reported Wednesday.

On a monthly basis, it decreased -1.2% compared to October's 109.27 points.

Cumulatively in the five months of fiscal year 2024-25, the LSM showed a contraction of 1.3% year-on-year.

The main contributors towards overall growth of -1.25% are, Food (0.23), Tobacco (0.39), Textile (0.40) Garments (1.76), Petroleum Products (-0.18), Automobiles (0.78), Cement (-0.61), Iron & Steel Products (-0.62), Electrical Equipment (-0.64), Machinery and Equipment (-0.25) and Furniture (-2.24).

The production in July-November 2024-25 as compared to July-November 2023-24 has increased in Food, Tobacco, Textile, wearing apparel, Automobiles and Other Transport Equipment while it decreased in Coke & Petroleum Products, Chemical Products, Non Metallic Mineral Products, Iron & Steel Products, Electrical Equipment, Machinery and Equipment, and Furniture. 

As a proxy for industrial production, policymakers in Pakistan rely on Large Scale Manufacturing (LSM), which is a sub-component of total industrial production.

The performance of LSM is a key indicator of the overall health of the industrial sector and is assessed monthly through the Quantum Index of Large Scale Manufacturing Industries (QIM).

Historically, LSM dominates the manufacturing sector of GDP, accounting for around 69% of manufacturing — a sub-component of Industry — and about 8% of the overall GDP.

Economic activity began to rebound in the second half of FY24.

However, global demand slump, currency devaluation, and a widening current account deficit severely limited the government's flexibility, particularly in maintaining fiscal discipline amidst stringent financial conditions.

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