Pakistan’s Large-Scale Manufacturing (LSM) sector continues to navigate a complex economic landscape, demonstrating mixed signals of resilience amidst ongoing challenges. During the first quarter of FY2025, the LSM sector recorded a slight decline of 0.8% year-on-year, an improvement compared to the 1.0% contraction observed during the same period last year. Notably, on a month-on-month basis, the sector showed modest growth of 0.5% in September 2024, signaling a fragile but positive recovery. However, on a year-on-year basis, the sector contracted by 1.9%, highlighting the persistent hurdles faced by industrial production.
Within the LSM subsectors, the automotive industry emerged as a bright spot, posting significant growth during the July-October FY2025 period. Vehicle production and sales grew by 21.2% and 21.8%, respectively, reflecting strong consumer demand and improved supply chains. Specific segments within the auto sector reported remarkable gains: car production surged by 51.0%, trucks and buses by 80.2%, and jeeps and pickups by 55.1%. However, tractor production faced a sharp decline of 54.2%, underscoring disparities in sectoral performance.
The cement industry, a key indicator of construction activity, painted a more nuanced picture. Total cement dispatches during July-October FY2025 declined by 7.9% year-on-year to 14.6 million tonnes. Domestic dispatches dropped by 15.0% to 11.4 million tonnes, reflecting subdued local demand. Conversely, cement exports surged by 30.7%, reaching 3.2 million tonnes, driven by robust international demand.
In October 2024, cement dispatches showed encouraging signs of recovery, rising by 8.7% compared to the same month last year. Total dispatches reached 4.4 million tonnes, with export dispatches climbing 51.3% to over 1 million tonnes. However, local dispatches slightly dipped by 0.5% to 3.3 million tonnes, indicating lingering domestic challenges.
These mixed trends highlight the LSM sector’s ongoing struggle to achieve consistent growth. While pockets of strength, such as the auto sector and export-driven cement dispatches, provide reasons for optimism, broader headwinds, including fluctuating demand and cost pressures, continue to weigh on performance.
The government and industry stakeholders must focus on addressing structural issues, enhancing industrial competitiveness, and bolstering export-oriented production. With strategic support and sustained recovery efforts, the LSM sector can play a critical role in driving Pakistan’s economic stability and growth.