After years of uneven and short-lived recoveries, Pakistan’s Large-Scale Manufacturing (LSM) sector is now displaying momentum that appears increasingly difficult to dismiss as temporary. November 2025 marked a clear break from past patterns, pointing towards a more durable and broad-based recovery across the industrial landscape.
Year-on-year growth of 10.37 percent in November was the strongest recorded since June 2022, while the LSM index matched levels last seen in November FY22. On a cumulative basis, LSM growth during the first five months of FY26 stood at 6.01 percent year-on-year, with the July–November index reaching the highest level ever recorded for this period.
Beyond headline growth, the breadth of the recovery has become its most defining feature. During 5MFY26, 16 industries posted positive growth, with only six sectors contracting. In November alone, just four industries remained in negative territory, the lowest number since February 2022. This shift confirms that LSM growth is no longer reliant on a narrow set of outperforming sectors, a recurring weakness in earlier recovery phases.
Sectoral performance further underscores this transition. Automobiles continue to anchor overall growth, but petroleum has emerged as a major contributor. On a cumulative basis, petroleum ranked second in its contribution to LSM growth, while in November it was the single largest driver. Year-on-year growth of 44 percent reflected record-breaking production levels, with both petrol and high-speed diesel achieving their highest-ever monthly output. This pushed the petroleum index to its strongest level since May 2018.
The food sector has also begun to gain traction. The sugar season has started on a stronger footing compared to last year, offering an early boost to food-related manufacturing. Given sugar’s significant weight within the food basket, sustained production between November and March could meaningfully lift cumulative food sector growth in the coming months.
An unexpected contributor in November was the beverage sector. Despite its relatively low weight, it made a notable contribution to overall LSM growth. The beverage index reached its highest-ever level for November, driven primarily by strong production of soft drinks and mineral water.
Textiles remain under pressure, though the impact is increasingly being offset by steady gains in readymade garment exports. While month-on-month volatility persists, year-on-year momentum remains intact, supported by a favorable base effect. Pharmaceuticals, meanwhile, continue to underperform overall, although November offered a positive signal as tablet production rebounded to a 40-month high, suggesting early signs of stabilization.
Transport-related manufacturing continues to reinforce the broader expansion. Motorcycle and bicycle sales reached four-year and six-year monthly highs respectively in November, aligning with strength across the automobile value chain and directly supporting LSM readings.
Macro conditions are now turning supportive rather than merely less restrictive. The easing interest rate cycle, significantly lower energy prices compared to the past two years, and incentives on incremental electricity consumption are collectively improving capacity utilization and sustaining output gains.
While FY22 remains the benchmark and is unlikely to be matched in FY26 without exceptionally high growth in the remaining months, the current trajectory suggests that LSM has decisively turned a corner. The recovery is broader, more balanced, and more credible than at any point since mid-2022, signaling a meaningful shift in Pakistan’s industrial outlook.
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