Pakistan’s industrial sector continues to show encouraging momentum, with Large-Scale Manufacturing (LSM) registering sustained growth in the early months of FY2026. The recovery has been largely supported by expanding demand in the automobile and construction industries, reflecting improving business confidence and domestic consumption patterns. The latest figures suggest that the country’s manufacturing base is steadily strengthening despite external challenges and temporary slowdowns in global trade.
According to the Pakistan Bureau of Statistics, LSM output increased by 4.4 percent during July–August FY2026, marking a steady expansion compared to the same period last year. Out of the key industries monitored, twelve sectors recorded positive growth, highlighting broad-based improvement across multiple segments. Among the most notable performers were wearing apparel, non-metallic mineral products, food, electrical equipment, automobiles, and tobacco. These industries collectively contributed to the upward momentum in industrial production, reinforcing the sector’s role as a driver of overall economic recovery.
On a monthly basis, LSM growth patterns reflected both resilience and seasonal adjustments. In August 2025, LSM recorded a marginal year-on-year increase of 0.5 percent, while on a month-on-month basis, it showed a 2.7 percent decline, indicating moderate fluctuations in output cycles typical of the post-summer industrial phase. Economists note that despite these variations, the underlying trajectory remains stable, driven by rising domestic demand, improved supply chains, and enhanced production capacity.
The automobile industry has been one of the standout contributors to this growth momentum. During the first quarter of FY2026 (July–September), the sector witnessed substantial gains across multiple categories. Production of cars surged by 74 percent, trucks and buses grew by an impressive 105.2 percent, while jeeps and pickups posted a 48.7 percent increase compared to the corresponding period of last year. This strong performance reflects growing consumer confidence, improved financing accessibility, and sustained investment from local and international automakers operating in Pakistan. The revival of auto demand also mirrors broader economic recovery trends, including rising incomes and renewed interest in durable goods.
Parallel to the automobile boom, the construction and cement sectors have also shown significant improvement, signaling strong domestic infrastructure activity. During the first quarter of FY2026, cumulative cement dispatches reached 12.2 million tonnes, up 16.2 percent compared to the same period last year. Domestic cement dispatches rose 15.1 percent to 9.6 million tonnes, supported by ongoing public and private construction projects. Cement exports also recorded healthy growth, rising by 20.8 percent to reach 2.6 million tonnes, reflecting improving regional demand and competitive pricing in international markets.
Industry analysts attribute this growth to a mix of factors including stable energy supplies, policy consistency, and improving investor sentiment. The government’s focus on promoting industrial productivity, particularly through fiscal incentives and infrastructure development programs, has provided critical support to LSM sectors. Moreover, better access to financing and improved logistics have enabled industries to scale up operations and meet both domestic and export demand.
Despite these positive developments, challenges such as inflationary pressures, rising input costs, and global supply chain disruptions remain potential risks to sustained growth. However, the strong performance in key industries such as automobiles and cement suggests that Pakistan’s industrial sector is building resilience against such headwinds.
As Pakistan continues its journey toward economic stabilization, the LSM sector’s consistent progress remains a vital indicator of the broader recovery. With supportive policies, private sector engagement, and sustained domestic demand, the industrial landscape is positioned to maintain its upward trajectory in the coming months.
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