Pakistan’s industrial output rises 4.44 percent despite August slowdown

ISLAMABAD: Pakistan’s large-scale manufacturing (LSM) sector saw a slight stumble in August, recording a 2.75 percent month-on-month decline. However, the sector still managed to stay in the positive zone during the first two months of the ongoing fiscal year, signalling cautious optimism for the country’s industrial recovery.

According to the latest data from the Pakistan Bureau of Statistics (PBS), overall LSM output grew by 4.44 percent during July and August of fiscal year 2025-26, compared with the same period last year. Despite the monthly drop, the year-on-year growth in August stood at 0.54 percent.

In July, LSM had posted an impressive 9 percent year-on-year jump, making the slowdown in August appear more of a correction after a strong start.

Mixed performance across sectors

The PBS data shows a varied picture across industries. The strongest contributions to the overall 4.44 percent growth came from food (1.02), garments (0.84), cement (0.98), and automobiles (1.83). On the other hand, textiles, petroleum products, pharmaceuticals, and machinery recorded slight contractions.

Sectors such as automobiles, non-metallic mineral products, and transport equipment showed remarkable expansion during the July-August period. The automobile industry in particular surged by 90.4 percent, while transport equipment jumped 44.47 percent, indicating a rebound in production and consumer demand.

Similarly, rubber products saw a strong 24.9 percent increase, while the cement sector rose by 17.31 percent and paper and board by 8.41 percent.

However, not all sectors shared this upbeat momentum. Beverages, petroleum products, and pharmaceuticals saw declines of 2.68, 2.69, and 1.77 percent respectively, while machinery and equipment dropped sharply by 33.84 percent.

Cautious optimism ahead

Economists believe the mixed trend suggests that while parts of the manufacturing base are showing recovery signs, structural challenges persist, particularly in energy-intensive and export-oriented industries. Sustained growth in the LSM sector will likely depend on stable input costs, better energy supply, and consistent domestic demand in the coming months.

Overall, despite the slowdown in August, the positive year-on-year growth in the opening months of FY26 offers a measure of encouragement for Pakistan’s struggling industrial sector.