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Large Scale Manufacturing industries post growth in July 2020

According to the statistics released by the Pakistan Bureau of Statistics (PBS), the Large-scale Manufacturing Industries (LSMI) production increased by 5.02 percent on a year-on-year basis during the first month (July) of the current fiscal year (FY21) as against to the same month of previous year. Statistics also showed that the LSMI Quantum Index Number (QIM) was registered at 134.14 points in July 2020, against 127.73 points in July 2019. The highest rise experts recorded of 2.25 percent was witnessed in indices monitored by the Ministry of Industries, followed by 1.77 percent rise in indices monitored by the Provincial Board of Statistics and 1 percent rise in the products surveyed by the Oil Companies Advisory Committee (OCAC). Manufacturing sector is the driver of economic growth due to its forward and backward linkages with other sectors of economy. kamal2pic1This sector provides employment opportunities to about 16.1 percent of the total labor force while its share in GDP is around 13-14 percent. Manufacturing sector has three sub-sectors: Large Scale Manufacturing (LSM), Small Scale Manufacturing (SSM) and Slaughtering. The performance of Large-Scale Manufacturing is based on Index derived from the Census of Manufacturing Industries (CMI) conducted in 2005-06 which does not capture latest information including new areas and sectors, however, the new Census of Manufacturing Industries (CMI) for 2015-16 is now complete and will be published by this year and will be used from next fiscal year for more comprehensive and accurate coverage of LSM in the country. Small Scale Manufacturing (SSM) information is also based on the survey conducted in 2006-07. It covers industrial and household units engaged in manufacturing activity having less than ten employees. Pakistan Bureau of Statistics has completed the census of SSM for 2015-16 and methodology for estimating the value addition of Slaughtering, which will be published in the next fiscal year. Presently the government of Pakistan introduced the 6th Doing Business Reforms Action Plan and Investment Promotion Strategy aimed at making the environment for business and investment more friendly, easy and less time consuming. The reforms it has made so far will help further boost Pakistan’s ranking on the World Bank EODB-2021 report. In EODB-2020, Pakistan made sizable improvement of 28th notches and jumped to 108th place from last year’s ranking of 136th. It is said Pakistan’s investment to GDP ratio over the last five years was average 15 percent whereas the average ratio of regional countries like Sri Lanka, Bangladesh, India, and Thailand was around 25 percent. The experts were optimistic that a better and conducive business climate would be instrumental in improving investment and growth. It is highlighted that every province had its own comparative and competitive advantage and providing enabling business environment was the key to make good use of this advantage.


Pakistan has consistently made efforts to improve the business environment in the country in collaboration with World Bank, International Finance Corporation. Furthermore on a month-on-month basis, the industrial growth witnessed a rise of 9.54 percent in July 2020 when compared with the indices of June 2020. The main sectors that explained growth during the period under review included textile (1.66 percent), food, beverages and tobacco (21.73 percent), coke and petroleum products (18.34 percent), pharmaceuticals (19.20 percent), chemicals (0.19 percent), non-metallic mineral products (29.01 percent) and paper and board (5.04 percent). On the other hand, the LSM industries that witnessed pessimistic growth included automobile (23.31 percent), iron and steel products (11.13 percent), fertilizers (5.06 percent), electronics (33.31 percent), leather products (35.95 percent), engineering products (32.60 percent), rubber products (15 percent) and wood products (18.63 percent).kamal2pic2

It is pertinent to mention that the provisional QIM is being computed on the basis of the latest production statistics received from sources, including Oil Companies Advisory Committee (OCAC), Ministry of Industries and Production (MoIP) and Provincial Bureaus of Statistics (PBoS). The experts recorded that the government’s ability to control the COIVD-19 pandemic early has benefited Pakistan’s economy in terms of growth in the large-scale manufacturing sector. Large scale manufacturing numbers for July show more than 9 percent growth over June and more than 5 percent growth against July 2019. Pakistan would have to move towards creating a predictable business environment and a fair taxation regime for getting support for future investment.

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