Pakistan’s Large Scale Manufacturing Industries (LSMI) posted a 4.08% growth in the first quarter of fiscal year 2025-26 (July–September), signaling a moderate yet positive trend in industrial production, according to provisional Quantum Index of Manufacturing (QIM) data released today. The QIM for July–September 2025-26 stood at 114.23, with September 2025 reaching 114.69, reflecting a 2.69% increase year-on-year and a 2.05% rise compared with August 2025.
The growth momentum was primarily driven by the automobile sector, which experienced a remarkable surge of 84.58% in Q1FY26, underscoring robust domestic demand and production efficiency. Cement production also recorded significant growth, climbing 15.32% during the quarter, while the food sector expanded by 6.94%. Textiles and garments contributed 1.88% and 2.43% respectively, highlighting the steady performance of Pakistan’s traditional export-oriented industries.
Other sectors registering positive growth included tobacco, paper & board, electrical equipment, and other transport equipment, collectively contributing to the overall improvement in industrial output. These gains indicate that key manufacturing sub-sectors are adapting well to evolving market demands and operational efficiencies.
However, growth was not uniform across all segments. Several industries recorded contractions compared with the same period last year. Pharmaceuticals declined by 4.81%, furniture by 22.26%, iron & steel products by 3.52%, chemical products by 4.38%, and machinery & equipment by 14.15%. These declines point to persistent challenges in certain capital-intensive and resource-dependent sectors, reflecting the need for targeted policy support and investment incentives.
On a month-on-month basis, September 2025 growth was largely fueled by the automobile sector (+75.25%), cement (+9.34%), and petroleum products (+6.96%), while fertilizers (-4.13%) and iron & steel (-3.70%) recorded declines. The mixed performance underscores both emerging opportunities and structural challenges in Pakistan’s industrial landscape, highlighting the importance of strategic interventions to sustain growth.
Analysts note that the overall 4% growth in LSMI for Q1FY26 reflects cautious optimism for Pakistan’s industrial sector. The surge in automobile production, in particular, demonstrates the potential for higher value-added manufacturing to drive broader economic growth, while the moderate expansion in cement, food, textiles, and garments signals steady demand in both domestic and export markets.
While certain sectors continue to face headwinds, the QIM data suggest that Pakistan’s industrial base is gradually stabilizing after periods of volatility, aided by improved supply chains, operational efficiencies, and targeted government policies. Continued monitoring of sector-specific performance will be critical to sustaining this growth trajectory and ensuring a balanced industrial recovery across all key manufacturing segments.
Overall, Q1FY26 performance in the LSMI sector offers a cautiously optimistic outlook for industrial expansion, with opportunities for targeted interventions to address sectoral declines and support long-term economic resilience.
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