Pakistan Bureau of Statistics has reported a year-on-year growth of 4.82 percent in large-scale manufacturing during the July-December 2025 period, attributing the improvement to strong performance in key sectors including automobiles, petroleum, garments, and cement. The growth contrasts with a negative 1.41 percent decline in the same period of the previous year, and a 6.01 percent rise recorded for July-November 2025, reflecting a low base effect from the prior fiscal year. However, the data faces scrutiny as it appears inconsistent with reports of a 9.2 percent growth in December 2025 compared to November, raising questions about the reliability of the statistics.
Recent surveys conducted by industry publications indicate that factory closures are reaching alarming levels. The textile sector reported the closure of 150 units, while steel and cement factories are operating at reduced capacity due to surging input costs. Government incentives aimed at supporting the LSM sector may be at risk if Pakistan is compelled to adhere strictly to IMF conditions, further adding pressure to an already fragile industrial environment. Several multinational companies have also announced shutdowns, highlighting operational challenges in the manufacturing sector.
One critical point of concern is whether the reported LSM growth reflects genuine production increases or merely higher sales that draw down existing inventories. The PBS relies on two primary data sources: the Census of Manufacturing Industries and the Quantum Index of Large-Scale Manufacturing. While the Census collects detailed data, the Bureau acknowledges that its production index weights have not been updated since 2015-16, and current statistics do not fully account for declines in inventories or actual output, focusing instead on sales figures.
Fuel consumption data from the Oil Companies Advisory Council further challenges PBS claims, showing significant declines across domestic, industrial, and power sectors. Domestic consumption dropped from 14,221 metric tons in July-December 2024 to 7,026 metric tons in the same period of 2025, while industrial consumption fell from 500,664 metric tons to 273,801 metric tons. The power sector also saw a steep reduction in fuel use from 96,292 metric tons to 20,003 metric tons. These trends suggest that the reported manufacturing growth may not align with on-the-ground production realities, particularly amid currency depreciation and stagnant wages in the private sector.
The discrepancy raises broader questions about the credibility of economic data released by PBS. Analysts argue that there is an emerging tendency to report positive figures that may not accurately reflect economic conditions, complicating policy formulation. IMF technical assistance aimed at addressing “important shortcomings” in PBS’s data collection could help improve the accuracy and timeliness of industrial statistics, providing a more reliable foundation for government and market decisions.
In conclusion, while PBS reports positive LSM growth for the first half of FY2025-26, survey evidence, fuel consumption trends, and operational challenges suggest that the sector is facing significant headwinds. Accurate, timely, and transparent data is essential to guide fiscal and industrial policies, particularly as Pakistan navigates inflationary pressures, currency volatility, and IMF oversight. The divergence between reported growth and real-world indicators underscores the need for strengthened data collection and verification mechanisms to support sustainable economic planning.
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