KARACHI: The Large-Scale Manufacturing (LSM) Index fell by 4.70% in June compared to the previous month, marking the first decline after 10 months of continuous growth. Despite this setback, experts expect the LSM Index to recover as demand picks up due to falling inflation and lower interest rates.
However, higher costs, such as taxes and energy prices, might limit growth in certain industries.
Steady growth in key sectors during fiscal year 2024
In the fiscal year 2024 (FY24), the Large-Scale Manufacturing (LSM) Index showed only a slight increase of 0.92%. Key industries like food, garments, and petroleum products contributed to this growth, while sectors such as tobacco, textiles, and automobiles saw declines, according to data compiled by Taurus Securities.
Textile production and exports show mixed results
Textile production in June 2024 grew by 4.2% compared to last year, mainly due to the higher output of yarn and woollen blankets. However, textile exports dropped by 3% in July 2024, with cotton arrivals down 49% due to heavy monsoon rains.
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Automobile production sees yearly increase despite monthly dip
Automobile production fell slightly in June 2024 due to the Eid holidays but still showed a 37% increase compared to the previous year, thanks to the lifting of import restrictions and a boost in economic activity. However, overall production for fiscal year 2024 was down, reflecting higher costs and lower consumer spending.
Cement and food sectors see mixed performance
Cement production dropped by 6% in June 2024 due to higher construction costs and reduced activity. Meanwhile, the food sector saw a modest 2% increase in production, led by cooking oil, wheat, and rice milling.
Petroleum production jumps in June 2024
Petroleum product output surged by 28% in June 2024, driven by higher production of key fuels like motorspirit and diesel. However, a drop in demand is expected in July, partly due to reduced agricultural activity and heavy rainfall during the monsoon season.
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