As the growth in the large-scale manufacturing (LSM) industries has further slowed down during the first four months of July-Oct of the current fiscal year the Pakistan Industrial and Traders Associations Front has stated that a National Industrial Growth Strategy from the government is essential with ownership at the highest level, warning of a big surge in their cost of doing business after the central bank massively jacked up interest rates.
PIAF senior vice chairman Nasir Hameed and vice chairman Javed Siddiqi observed that the pace of growth in the LSM sector had eased even before the central bank started to tighten the monetary policy from the end of November 2021.
Nasir Hameed said that for two consecutive months, the monthly LSM index has been posting negative growth. On a year-on-year basis, the LSM sector contracted 1.2% in October over the same month a year ago. He said that the low base effect has so far been driving the growth in large industries as the index had dropped to a low level of 86.2 in April last year from the peak of 160 before Covid-19 struck Pakistan. The index remains below the pre-Covid level as it stood at 143 in October.
Out of 15 major industries, 11 recorded growth in their outputs while production in the remaining four sectors contracted. Since large industries contribute heavily to revenue collection and job creation, any change in their growth impacts the government and business sentiment accordingly.
Javed Siddiqi said that it is unfortunate that the LSM, which constitutes 80 percent of manufacturing and about 11 percent of the overall GDP, has not been showing significant growth amid sluggish economic activities in the country, he lamented.
