ISLAMABAD    -     The economic activities are continuously slowing down in the country, as the large-scale manufacturing index (LSMI) declined by 5.91 percent during first quarter (July to September) of the current fiscal year.

The LSMI had shrunk by 5.63 percent in the month of September 2019, the Pakistan Bureau of Statistics (PBS) reported on Friday. The large-scale manufacturing output had declined for tenth month in a row amid sluggish economic activities in the country. The official data showed that growth in big industries like food, beverages, pharmaceutical, chemical, fertilisers, leather and iron, automobiles and steel sectors had declined in first three months of the ongoing fiscal year.

The government had set LSM target of 3.1 percent for the year 2019-20. However, the government might not achieve the LSM growth target due to the performance of major industries in first quarter of the current fiscal year. According to the PBS, production data of 11 items from Oil Companies Advisory Committee had registered a negative growth of 0.96 percent in July to September period of the year 2019-20. Similarly, the LSM data, provided by the Ministry of Industries and Production for 36 items, had also shown negative growth of 3.72 percent during the period under review. However, the data provided by the provincial Bureaus of Statistics for 65 items had recorded negative growth of 1.23 percent over the same period.

The negative growth is mainly the outcome of dip in production of automobiles that went down by 34.13 percent and wood products by 28.76 percent. Similarly, production of coke and petroleum products had declined by 14.48 percent. Meanwhile, production of iron and steel products had decreased by 17.04 percent, followed by pharmaceutical, whose production declined by 11.95 percent. Production of food, beverages and tobacco had also gone down by 8 percent. The data showed that production of chemicals decreased by 8.93 percent and paper and board production also down by 2.01 percent.

Meanwhile, according to the PBS data, electronic products had recorded growth of 5.51 percent; fertilizers 15.94 percent, engineering products 12.54 percent and rubber products had also recorded growth of 2.29 percent during the period under review.

On a year-on-year basis, almost all vehicles in the auto sector posted decline in previous fiscal year. Policy measures like regulatory restrictions prohibiting non-filers from purchase of vehicles, and increase in interest rates dented the demand in the automobile segment to some extent. Furthermore, significant depreciation of PKR increased the cost of production, resulting in escalated prices and dampening the demand further. In auto sector, tractor production went down by 31.21 percent, light commercial vehicles 21.7 percent, trucks 61.01 percent, jeeps and cars 38.57 percent and motorcycles 22.04 percent during the period under review.

In the non-metallic mineral products, cement dipped 1.47 percent in the period under review. The cement sector has been going through a major expansionary phase in recent years, mirroring the increase in economic activity in the country. Moreover, production of cooking oil, and tea blended dipped by 0.77 percent and 20.88 percent, respectively. However, vegetable ghee production increased by 1.75 percent on a year-on-year basis.