Pakistan’s major industries’ output declines by 4.70 per cent

WEB DESK: Pakistan’s Large-Scale Manufacturing (LSM) Index fell by 4.70 per cent in June 2024, marking its first decline after ten consecutive months of growth.

Despite this recent setback, analysts remain optimistic about a potential rebound, anticipating that reduced inflation and lower interest rates will stimulate demand and support recovery in the coming months.

However, certain sectors may face challenges due to rising costs associated with taxes and energy prices, which could limit growth. For the fiscal year 2024 (FY24), the LSM Index recorded a modest increase of 0.92 per cent.

This slight uptick was primarily driven by key industries such as food, garments, and petroleum products. Conversely, sectors including tobacco, textiles, and automobiles experienced declines, as indicated by data from Taurus Securities.

In June 2024, textile production saw a 4.2 per cent rise year-on-year, largely due to increased output of yarn and woollen blankets. Nevertheless, textile exports fell by 3 per cent in July 2024, partly due to a 49 per cent drop in cotton arrivals caused by heavy monsoon rains.

Automobile production in June 2024 experienced a minor dip due to the Eid holidays but still registered a 37 per cent year-on-year increase, bolstered by the lifting of import restrictions and heightened economic activity.

Despite this growth, overall production for FY24 declined, reflecting higher costs and reduced consumer spending.

Petroleum product output surged by 28 per cent in June 2024, driven by increased production of key fuels such as motorspirit and diesel. However, a decrease in demand is anticipated for July, partly due to reduced agricultural activity and extensive monsoon rainfall.

Cement production saw a 6 per cent decline in June 2024, attributed to higher construction costs and diminished activity. Conversely, the food sector experienced a modest 2 per cent increase in production, led by cooking oil, wheat, and rice milling.

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