Pakistan’s Large-Scale Manufacturing (LSM) sector is showing early signs of recovery, with recent data pointing to renewed activity across multiple industries. According to official figures, LSM registered a year-on-year increase of 4.1 percent in June 2025, reflecting improved performance across key sub-sectors including textiles, wearing apparel, petroleum products, beverages, and pharmaceuticals.
On a month-on-month basis, however, LSM output declined by 3.7 percent in June, highlighting the ongoing volatility that continues to shape the country’s industrial landscape. For the full fiscal year 2025, cumulative LSM output fell marginally by 0.74 percent compared to a small growth of 0.78 percent in FY2024. While the overall annual trend reflects subdued expansion, analysts point out that sectoral growth momentum in certain industries suggests a gradual recovery path.
Out of the 22 monitored sectors, 12 recorded positive growth, signaling a broader base of activity. Textiles, Pakistan’s largest industrial sector, maintained steady expansion, while petroleum products and pharmaceuticals also posted solid growth. Beverages and wearing apparel contributed positively as well, reflecting both domestic demand and export-linked opportunities.
The automobile industry has emerged as one of the strongest performers in early FY2026. Production of cars surged by 49 percent in July, while trucks and buses recorded a sharp 40.1 percent increase. Jeeps and pickups also saw a notable rise of 34 percent, suggesting a revival of consumer demand and supply chain improvements. Industry experts note that easing import restrictions on parts and components, combined with policy measures to stimulate auto financing, may have contributed to this surge in production.
The cement industry has also demonstrated strong momentum. Cement dispatches rose to 3.997 million tonnes in July FY2026, representing a 30.1 percent increase compared to the same period last year. Domestic sales climbed by 18.4 percent to 2.988 million tonnes, while exports registered an extraordinary growth of 84.2 percent, reaching 1.008 million tonnes. This dual rise in local and international demand highlights the sector’s resilience and its role as a key contributor to industrial activity and economic growth.
Economists suggest that the recent uptick in LSM performance, particularly in autos and cement, could help offset broader economic pressures if sustained over the coming quarters. However, they caution that persistent challenges such as high energy costs, fluctuating raw material prices, and external demand uncertainties continue to weigh on the industrial outlook.
The government has emphasized its commitment to stabilizing the industrial sector through supportive policies, credit facilities, and infrastructure development. As sectors like automobiles and cement regain momentum, their multiplier effect on related industries may provide a further boost to overall economic performance.
While the LSM sector still faces hurdles, the latest indicators point to a cautiously optimistic recovery trajectory. Sustained growth in key industries could pave the way for stronger output and job creation, reinforcing the sector’s role as a cornerstone of Pakistan’s economy.
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