Pakistan’s Manufacturing Sector Faces Continued Decline

Islamabad: The Pakistan Bureau of Statistics (PBS) has reported a 3.7% year-on-year decrease in Large Scale Manufacturing (LSM) for December 2024, marking the third consecutive year of negative growth in the first half of the fiscal year.

According to a statement by JS Global, this decline is part of a broader trend, with negative year-on-year growth in four of the last six months. The cumulative LSM index for the first half of the fiscal year 2025 posted a negative growth of 1.9% year-on-year.

The decline in LSM is attributed to decreases in key sectors, including Non-Metallic Minerals, which fell by 10%, Iron and Steel by 11%, Food by 6%, and Chemical Products by 5%. These figures highlight ongoing challenges within these sectors and their downstream industries.

Economic analysts suggest that the continued increase in operational costs and fiscal tightening are significant risks to the future growth of LSM. However, a disinflation trend could improve demand and stabilize production, creating a more favorable environment for potential growth in the sector.

The report underscores the complex dynamics affecting Pakistan’s manufacturing industry, as it navigates both internal challenges and broader economic pressures.

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