Data released by the Pakistan Bureau of Statistics on Tuesday showed that Large Scale Manufacturing (LSM) grew 4.85 percent in February-2021, reflecting the slowdown in industrial production.

On a monthly basis, large industrial production contracted by 4.15% as compared to January-2021.

LSM expansion slowed in January after posting double-digit growth in December and November due to higher production of cars, cement and sugar products, reflecting a revitalization of manufacturing.

In December and November 2020, the LSM index grew 11.4% and 14.5% respectively.

During the first eight months (July-February) 2020-21, LSM grew by 7.45%.

The Medium-Term Budget Strategy document, released on Tuesday, showed that LSM exceeded its pre-Covid production level in January, showing annual growth of 9.1 percent (minus 5.7 percent in January 2020) while increasing monthly by 5.4 percent in January 2021 ( 13.5 percent in December 2020).

Overall, during the period from July to January 2020-21, the LSM grew by 7.9% compared to last year’s contraction of 3.2%.

Since July 2020, LSM has recovered after months of recession due to Covid-19 mainly in the sectors of construction, textiles, food, chemical, non-metallic metal products, automobiles and pharmaceuticals. The recovery during the eight months of Fiscal Year 21 reflects the revitalization of economic activities.

The PBS snapshot of manufacturing activity showed that eight of the 15 LSM subsectors increased during the month under review. Lower interest rates and lower tariffs on raw materials are expected to further boost economic activities in the current fiscal year.

By sector, production of 11 items under the Oil Companies Advisory Committee increased by 42.66% year-on-year during the month of February. 36 articles based on the Ministry of Industry and Production increased by 3.16%, while the 65 articles reported by regional statistical offices increased by 4.83%.

LSM accounts for approximately 80% of the country’s total manufacturing and roughly 10.7% of the national production. In comparison, small industry accounts for only 1.8% of the GDP and 13.7% of the secondary sector.

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