Large-scale manufacturing decline 1.2% in October

KARACHI: Large-scale manufacturing industries (LSMI) in October, 2021 showed big industry output inched down 1.2 per cent year-on-year, Pakistan Bureau of Statistics (PBS) data showed.

“On yearly basis in October 2021, the decline in production of non-metallic mineral products i.e., cement declined 13.2 per cent, pharmaceuticals i.e., tablets 23.1 per cent, capsules 44.4 per cent and injections fell 36.9 per cent on a year-on-year basis dragged the production downwards,” Fayyaz Hussain at Sherman Securities said.

In addition, production of nitrogenous and phosphate fertilisers fell 7.6 per cent and 0.1 per cent respectively, contributing to the overall decline.

“We believe [that] higher international coal prices forced cement manufacturers to curtail production during October whereas high base impact also magnified the quantum of change”.

Meanwhile, the production of electronics also declined 30.2 per cent year-on-year during the month under review. The production of white goods increased whereas it was offset by lower production of electric motors and storage batteries.

The automobile production i.e., jeeps and cars recorded an increase of 45.1 per cent, coke and petroleum products 14.8 per year-on-year, which arrested the decline during the month under review.

On a cumulative basis, the LSM output during the first four months of FY22 registered a moderate growth of 3.6 per cent against the same period last year mainly on account of high base effect in the first four months of FY21 and higher raw material prices in the international markets during the period under review.

“Overall, we expect [the] LSM indices to remain flat during November but rise from December mainly on the back of YoY [year-on-year] increase in sugar production due to bumper crops. Meanwhile, higher contribution from the textile sector on account of higher export targets for FY22 will also increase production of cotton yarn and cotton cloth,” Hussain added.

However, rising operating costs including raw material, energy prices and interest rates remain key concerns for broader LSM numbers during the second half of FY22.

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