Large Scale Manufacturing Contraction in Pakistan Q1 FY25

The Large Scale Manufacturing Industries (LSMI) sector in Pakistan has recently faced a challenging period, as indicated by the latest data from the Pakistan Bureau of Statistics (PBS). During the first quarter of the fiscal year 2024-25, which spans from July to September, the sector experienced a contraction of 0.76%. This decline highlights the mixed trends that have emerged across various industries, reflecting both growth and setbacks in different sectors.

In September 2024, the Quantum Index of Manufacturing (QIM) recorded a figure of 111.95. This number represents a month-on-month growth of 0.46% compared to August. However, when looking at the year-on-year performance, there was a notable decline of 1.92% when compared to September 2023. Such statistics paint a complex picture of the manufacturing landscape in Pakistan.

When we delve deeper into the sectoral analysis, we can see that not all industries are faring poorly. The garments sector has emerged as a significant player, showcasing impressive growth with a 23.83% increase in September alone and a 17.62% rise for the entire quarter. Similarly, the automobile sector has also shown robust performance, expanding by 32.96% in September and 26.44% in the first quarter of FY25. These figures indicate that while some areas are struggling, others are thriving and contributing positively to the overall economy.

Conversely, the cement production sector has faced considerable challenges, with a decline of 15.68% in September and a 15.03% drop for the quarter. The iron and steel products sector has also not fared well, contracting by 10.67% in September and 12.60% for the quarter. These negative trends in key sectors underscore the ongoing difficulties faced by the manufacturing industry.

Other sectors have shown varied performances as well. For instance, petroleum products experienced a growth of 9.52% in September and a 7.85% increase for the quarter. Fertilizers also posted modest gains, with increases of 4.84% and 2.33%, respectively. The PBS data clearly indicates that while some sectors are contributing positively to the economy, others are dragging down the overall performance.

In summary, the LSMI sector remains a crucial driver of economic activity in Pakistan. However, the mixed performance across different industries highlights the ongoing challenges that the sector faces amid broader economic constraints. As the country navigates these turbulent waters, it is essential for stakeholders to focus on strategies that can bolster growth in struggling sectors while continuing to support those that are performing well. The future of manufacturing in Pakistan will depend on the ability to adapt and innovate in response to these challenges.