ISLAMABAD: Despite claims of macroeconomic stability, Pakistan’s Large-Scale Manufacturing (LSM) sector contracted by 1.5% during July-March FY25.
LSM accounts for 67.5% of the overall manufacturing sector and is a key driver of industrial growth.
The Economic Survey 2024-25, released by Finance Minister Muhammad Aurangzeb, attributed this decline to persistent structural bottlenecks, high input costs, and downturns in key industries such as food, chemicals, iron and steel, and electrical equipment.
Although the manufacturing sector grew modestly by 1.3% in July-April compared to 3% in the previous year, the overall recovery remains fragile.
Mixed Performance Across Industrial Sectors
Out of 22 industrial groups, 12 reported growth during July-March FY25, reflecting a partial recovery in certain segments.
The textile sector showed notable improvement with a 2.2% growth, supported by a 7.6% increase in wearing apparel and an 8.4% rise in cotton yarn production.
Other sectors like pharmaceuticals grew 2.3%, automobiles surged 40%, and coke and petroleum products increased by 4.5%.
However, the food group contracted by 0.5%, with declines in sugar, bakery products, and confectionery, largely due to deregulation of sugarcane prices and new Federal Excise Duty imposition raising production costs.
Mining Sector Faces Setbacks Amid Mineral Growth
The mining and quarrying sector contracted by 3.4% in 9MFY25, showing slight improvement from the previous year.
Growth was seen in the extraction of sulphur (341.9%), dolomite (43.3%), limestone (34.1%), marble (20.2%), and ocher (70.3%).
Conversely, outputs of crude oil, natural gas, coal, and iron ore declined, indicating ongoing challenges in energy and metallic mineral production.
The survey emphasized that despite early signs of economic stabilization, the LSM sector continues to face structural hurdles, high input costs, and weak investment, necessitating deeper reforms for sustainable industrial growth.
