The growth of large-scale manufacturing (LSM) sector, which accounted for 70 percent of total manufacturing output and 52 percent of total output of industrial sector in FY05 and was responsible for 27 percent of the contribution of commodity producing sectors to overall real GDP in that year, decelerated to about 9 percent in first 9 months of FY06 (July-March).
This compared with the overall annual growth rate of 15.6 percent achieved by the LSM sector in FY05. This transpired from the data released by the State Bank of Pakistan on June 14 covering about 75 percent of manufacturing activity of the sector.
At this stage, it appeared well nigh impossible for the overall LSM sector to have grown by another six/seven percent in the span of the remaining three months to catch up to the annual growth rate of last year. [The LSM posted a growth of just 9 percent during the current year, against the target of 13 percent, and last year's growth of 15.4 percent.]
Among the two heavyweights accounting for over 50 percent of the manufacturing activity covered, 'textile' (weight 24.492) scored a growth rate of only 3.98 percent during July-March period while 'food, beverages and tobacco' (weight 14.352) achieved a growth rate of 6.95 percent during the same period. Within 'textile', the largest growth rates of 11.16 percent and 0.07 percent were scored by 'cotton yarn' and 'cotton cloth', respectively accounting for nearly 84 percent of overall textile manufacturing activity.
Data on 'cotton ginned', representing about 14 percent of the activity in the sub-sector, showed a decline in production of about 11 percent, being a reflection of lower cotton output during FY06.
According to statistics finalised in the National Accounts Committee meeting on May 24, cotton production declined by 12.95 percent to 6.336 million tons against previous year's production of 7.279 million tons as the area under cultivation declined by 3 percent to 3,096,000 hectares against 3,192,600 hectares of past year.
The largest scorers within 'food, beverages and tobacco' were 'cooking oil' (17.60 percent), 'vegetable ghee' (13.16 percent) and 'cigarettes' (4.74 percent) together accounting for nearly 64 percent of production activity in the sub-sector. Output of another heavyweight (viz sugar), which accounted for nearly one-third of total manufacturing activity of this sub-sector, went down by 2.4 percent during the year up to end March 2006, being again a reflection of lower sugarcane output. Sugarcane production was reported to have declined by 6.2 percent to 44.312 million tons, against 47.244 million tons produced last year with area under cultivation posting a decline of by 6.1 percent to 907,000 hectares during the year against 966,300 hectares cultivated during FY05.
Other significant growth rates were achieved by 'pharmaceuticals' (14.17 percent with output of injections increasing by 30 percent), 'tyres and tubes' (12.20 percent), 'paper and board' (11.85 percent), 'electronics' (11.78 percent with 'air conditioners', 'TV sets' and 'refrigerators' posting growths of 19.63 percent, 12.25 percent and 11.27 percent respectively), 'leather products' (10.84 percent), 'chemicals' (9.89 percent with soda ash and caustic soda growing by 6.68 percent and 5.85 percent respectively), 'fertilisers' (9.78 percent), and 'non-metallic minerals' (9.49 percent). These manufacturing sub-sectors together accounted for some 31 percent of the covered LSM sector.
'Automobiles'--a sub-sector enjoying a weight of 3.995 within a total of 100--posted an increase of about 28 percent in output while two other sectors enjoying rather insignificant weights, namely, 'wood products' and 'engineering items' grew by hefty 47 percent and 40 percent respectively. Together, the two were responsible for less than even 0.5 percent of the total LSM activity. These hefty growth rates, indeed, cannot contribute much to the overall growth rate of the LSM sector.
Sub-sector 'metal industries', enjoying a weight of 3.504, was the biggest failure during FY06 so far recording a decline in output of 0.75 percent with production of pig iron, coke, billets, HR/coils and plates and CR coils etc posting major declines.
Within other sectors, a major decline was also reported in the case of 'buses' whose output within 'automobiles' declined by about 62 percent. (Report by [email protected])
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