Pakistan's manufacturing output decreased 1.22% in January

ISLAMABAD - The Large-Scale Manufacturing (LSM) sector in Pakistan faced another setback in January, with production dropping by 1.22% compared to the same month last year. This decline continues a trend that began in August 2024, despite a significant cut in the key interest rate to 12%. The LSM had shown positive growth briefly from December 2023 to May 2024 before falling again. Year-over-year, production had already fallen by 2.65% in August and 1.92% in September. October saw a minute growth of only 0.02%, but losses resumed again in late 2024. The first seven months of the current fiscal year also reflected a 1.78% decrease compared to the previous year. In the food industry, production dropped by 2.67% year-over-year from July to January. Wheat and rice milling improved by 5.88%, mainly due to better crop yields, but production of vegetable ghee and tea saw declines. The textile sector grew by 2.08%, with cotton yarn production increasing by 8.73%. This growth was driven by a rise in export orders as buyers shifted from Bangladesh to Pakistan. Garment exports surged by 10.39%. There was some positive news in the automobile sector, which experienced significant growth of 45.74% year-on-year. However, the production of certain diesel engines fell by nearly 9%. Challenges for the automotive industry included rising prices and limited financing options. Pharmaceuticals saw a slight increase in production by 1.96%, while fertilisers grew by 0.65%. In contrast, iron and steel production fell by 11.96%, impacting construction industry supplies. Overall, the LSM sector is struggling to regain momentum amidst various economic pressures.