According to the data released by Pakistan Bureau of Statistics, the large-scale manufacturing (LSM) sector posted a 3.28 percent decline in production for July 2019 over the same month in 2018, as the country faces an overall economic slowdown.
Compared to June 2019, however, it increased by 0.98 percent in July.
The large-scale manufacturing sector's output has declined since the start of the calendar year, as there was a sharp decline in all major production industries.
In this high-interest rate environment, it is unlikely that the private sector can trigger economic expansion or increase investment as the cost of doing business has increased.
Lackluster performance in the industrial sector reflected the overall economic slowdown across various sectors. Higher inflation, due to currency depreciation and the imposition of indirect taxes, has also adversely affected the purchasing power of the people.
LSM constitutes 80 percent of manufacturing and 10.7 percent of the overall GDP.
LSM data shows that various factors led to the slowdown including lower Public Sector Development Program expenditures compared to last year, a decline in the private sector construction activities and consumer spending on durable goods.
Out of the three data collection authorities, two of them registered a decrease in production while one showed a minimal increase for the month of July.
The negative growth was mainly the outcome of a dip in production of cars that went down by 27.41 percent, as well as iron and steel products which declined by 15.44 percent. Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured 25.12 percent decrease in output during the month.
The production in July 2019 as compared to July 2018 has increased in Fertilizers (16.34%), Electronics (67.23%) and Engineering products(8.08%) while it has significantly decreased in Food, Beverages and Tobacco, Coke and Petroleum Products, Pharmaceuticals, Automobiles, and Iron and Steel Products.
Source: Pro Pakistani