Pakistan’s Industry Contracts by 3% in FY23

Pakistan’s industrial sector posted a negative growth of around 3 percent in the current fiscal year (FY23), according to the Pakistan Economic Survey 2022-23 unrelieved on Thursday. The performance of industrial sector is more dependent on the manufacturing sector which has a share of 65.0 percent in the industry. LSM is reflected by Quantum Index Numbers (QIM) data. The large scale manufacturing driven by QIM has posted a negative growth of 7.98 percent due to Food (-8.71 percent), Tobacco (-23.78 percent), Textile (-16.03 percent), Coke and Petroleum Products (-10.24 percent), Chemicals (-6.29 percent), Pharmaceuticals (-23.20 percent), Fertilizers (-9.54 percent), Non-metallic products which include cement (-10.75 percent), Iron & Steel Products (-4.02 percent), Electrical equipment (-11.15 percent), Automobiles (-46.01 percent) and other transport equipment (-38.91 percent). However, electricity, gas and water industry show a growth of 6.03 percent mainly due to higher output reported by the sources. The value added in the construction industry, mainly driven by construction-related expenditures by industries, has registered a negative growth of 5.53 percent mainly due to conservative reporting of construction-related expenditure by private as well as public sector enterprises and unusual increase in relevant deflator i.e. WPI building material. Mining and quarrying has a 9.0 percent share in industry, the growth in mining and quarrying is -4.41 percent due to a decline in the production of natural gas, crude oil, and exploration cost. This sector also observed a negative growth of 7 percent in FY22. During FY23, the other components of Manufacturing, Small Scale, and Slaughtering posted growth of 9.0 and 6.3 percent, respectively. The positive growth in Small Scale and Slaughtering is probably driven by the substitution effect of restricted imports. Overall, the manufacturing sector posted a growth of -3.94 percent.