Large-scale manufacturing (LSM) continued its upward trend, increasing 12.84 percent from July to April period of fiscal year 2021, the highest cumulative growth in nearly four years. Growth in April reached a huge 68 percent year-over-year as the base of last year’s was extremely low fue to nationwide shutdown.
The monthly LSM index in fiscal year 2021 recorded the highest monthly values in six out of ten months. The cumulative value of the index remained the highest for three consecutive months. This trend contrasts with other quarters of the year as industrial production remained slow.
While LSM does not account for all manufacturing activity, LSM activity at an all-time high suggests that the output gap in the broader industrial economy should close very quickly if it has not already done so.
LSM Index Growthw as led by food (beverages, tobacco), textiles and cement, accounting for three-Fourth of the impact of 10-months growth in fiscal year 2021.
The cement and automotive sectors have led a historic growth as the period of low-interest rates stays. With a combined LSM share of 10%, the impact on aggregate growth is about one-fifth.