Pakistan’s large-scale manufacturing sector recorded a sharp slowdown in growth, rising by just 0.54 percent year-on-year in August compared to a strong 8.99 percent surge in July. The decline reflects the widespread impact of recent flooding on industrial operations across several key sectors, according to the latest official data released on Friday.
On a month-on-month basis, large-scale manufacturing output fell by 2.75 percent in August, marking a clear loss of momentum as the new fiscal year began. This slowdown follows an earlier rebound in July and underscores the challenges industries face when dealing with environmental disruptions.
Despite the weak performance in August, the cumulative growth for the first two months of the fiscal year (July–August) remained relatively healthy at 4.44 percent. Much of this improvement was driven by higher activity in the automobile and cement sectors, which had shown promising signs of recovery after a prolonged period of contraction.
The large-scale manufacturing sector contributes around 8 percent to Pakistan’s GDP. It contracted by 0.74 percent in FY25, missing its 3.5 percent growth target. The sector had also shown marginal weakness in FY24, declining by 0.03 percent after posting 0.92 percent growth in FY23. The latest figures indicate continued structural weaknesses in the industrial base and its vulnerability to external shocks such as floods.
Food manufacturing posted one of the strongest performances during July–August, with output rising by 7.77 percent year-on-year. Wheat and rice milling grew 9.83 percent on the back of improved harvests. Cooking oil and vegetable ghee production also increased by 8.56 percent and 3.43 percent, respectively. Tea blending, however, declined by 5.20 percent, pointing to shifts in consumer demand and input availability.
Textiles, Pakistan’s largest industrial group, remained largely stagnant with a slight decline of 0.15 percent. Cotton yarn and cotton cloth output increased modestly by 2.94 percent and 0.31 percent, but falling export prices and subdued global demand dragged the sector down. Although garment exports grew 4.92 percent year-on-year, garment production plunged by more than 10 percent in August, raising alarms about the sustainability of value-added exports.
The petroleum sector showed mixed results, with coke and petroleum output dropping 2.69 percent during the period. Petrol production decreased 4.19 percent, kerosene fell 16.86 percent, and jet fuel dropped 9.70 percent. High-speed diesel and LPG production were notable exceptions, rising 6.55 percent and 9.58 percent respectively.
One of the brightest spots in the industrial landscape was the automobile sector, which surged by 90.40 percent in July–August. Production of cars and jeeps rose by 95.47 percent, trucks by 100 percent, light commercial vehicles by 38.58 percent, and buses by 13.53 percent. Diesel engine output also grew by 2.37 percent. This performance reflects pent-up demand, supply chain stabilization, and new model launches after months of slowdown.
Other sectors showed mixed results. Pharmaceutical output declined by 1.77 percent, while fertiliser production rose slightly by 0.60 percent. Iron and steel contracted by 3.44 percent, mainly due to a 10 percent fall in billets and ingots. Cold-rolled and hot-rolled steel products declined by 0.73 percent. Non-metallic minerals, driven by construction activity, increased sharply by 17.31 percent. Rubber products recorded a significant rise of 24.90 percent, and electrical equipment production grew by 2.79 percent.
The latest data paints a complex picture of Pakistan’s industrial economy. While some sectors like automobiles and construction-related industries are driving growth, broader manufacturing momentum remains fragile. Floods have added to existing structural challenges, putting pressure on policymakers to address vulnerabilities and support industrial recovery.
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