Pakistan’s industrial sector is showing renewed momentum as Large-Scale Manufacturing (LSM) growth trends upward, reflecting recovery across multiple industries and rising investor confidence. According to official data, LSM registered a significant year-on-year increase of 9.0 percent in July 2025, while month-on-month growth was recorded at 2.6 percent.
Out of the 22 tracked industries, 16 reported positive growth, underscoring the broad-based nature of the recovery. Key sectors leading this upward trajectory include textiles, wearing apparel, coke and petroleum products, non-metallic mineral products, and pharmaceuticals. This diversified growth pattern indicates that Pakistan’s industrial base is gaining stability after facing economic headwinds in recent years.
One of the most encouraging performances came from the automobile sector, which has shown substantial gains in output. During July–August of FY2026, the production of passenger cars surged by 100.9 percent, trucks and buses by 69.5 percent, and jeeps and pickups by 50.1 percent compared to last year. Analysts suggest that this surge reflects both improved demand and a recovery in supply chains that had been disrupted previously. The revival of automobile manufacturing is also expected to have positive spillover effects on related industries, such as steel, glass, and auto parts.
The cement sector has also delivered a strong performance during the early months of FY2026. Cumulative cement dispatches reached 7.847 million tonnes in July–August, representing a 20.9 percent increase compared to the same period last year. Domestic demand contributed 6.090 million tonnes, showing a year-on-year growth of 14.2 percent, while exports recorded an impressive 51.3 percent rise, totaling 1.757 million tonnes. This surge in exports highlights Pakistan’s growing role in meeting regional construction material demand.
The textile and apparel sector, a backbone of Pakistan’s exports, maintained positive growth momentum during this period. Strong international orders and an improving domestic environment have contributed to higher production levels. Similarly, the pharmaceutical sector’s output has increased, reflecting both rising domestic healthcare needs and export opportunities.
Industry experts believe that the overall LSM growth trend signals resilience in Pakistan’s economy despite fiscal and inflationary pressures. The broad-based expansion across industries shows that the manufacturing base is responding positively to policy support, stable energy supplies, and gradual improvements in market conditions. However, sustaining this momentum will depend on continued policy consistency, external demand stability, and the availability of affordable credit for businesses.
The petroleum and mineral products categories also showed healthy contributions, reflecting higher activity levels in energy-related industries. Rising demand for non-metallic mineral products, in particular, is closely tied to growth in the construction sector, further boosted by infrastructure development projects.
Economists point out that while the numbers are promising, structural reforms remain essential to secure long-term industrial growth. Issues such as energy costs, currency volatility, and access to financing remain critical challenges. Still, the upward trend in LSM provides optimism that the industrial sector could serve as a key driver of overall economic growth in FY2026.
Pakistan’s LSM performance in July and August 2025 signals a stronger footing for the country’s manufacturing industries, highlighting resilience in key sectors and opening opportunities for further expansion. With automobiles, cement, textiles, and pharmaceuticals leading the way, the outlook for industrial growth remains cautiously optimistic.
Follow the PakBanker Whatsapp Channel for updated across Pakistan’s banking ecosystem.