Pakistan's Industrial labor market unable to regain its pre-Covid level: Report

Despite ease in lockdown restrictions, the industrial labor market had been unable to regain its pre-Covid level by end-August 2020, revealed the State Bank of Pakistan (SBP) in its latest report.

As per the central bank report, the employment data for the provinces of Punjab and Sindh suggests that there was an improvement in the manufacturing sector during the Jul-Aug FY21 period when compared to peak-restriction period of mid March 2020 to April 2020.

The gradual ease in mobility restrictions lead to increase in employment in the industrial sector in these provinces.

The report revealed that during the initial phase of the lockdowns, as much as 10 percent of the industrial workers lost their jobs. Gradual ease in restrictions in the following months allowed some recovery; however, the industrial labor market had been unable to regain its pre-Covid level by end-August 2020, it said.

As per the province-wise data job losses in the manufacturing sector in Sindh were higher and the pace of recovery was also slower. The report was of the view that higher job losses in Sindh can possibly be linked to heavy monsoon downpour and subsequent flooding especially during August 2020 in the industrial hub of Karachi.

From a sectoral perspective, although there were job losses across the board during the peak Covid period, they were more noticeable in sugar and leather industries.

Compared to February 2020 levels, 23.5 percent of the workers lost their jobs during the lockdown period in the sugar industry. Even after the lockdown was lifted, the sugar industry continued to post job losses.

The leather industry also saw employments levels drop during the lockdown period; however, unlike sugar, jobs in the leather industry started to inch up in post-lockdown scenario.

However, amid lifting of restrictions, a few industries started to hire more workers. For instance, job opportunities in cement and textile industry rose above the pre-Covid levels by August 2020.

The positive developments are consistent with growth in output of these industries; output of the cement and textile sector grew by 22.8 and 2.1 percent in Q1-FY21, compared to visible contraction of 12.8 and 33.9 percent in Q4-FY20.