LSM growth down by four percent in July

Large Scale Manufacturing (LSM) growth has decelerated and witnessed a decline of some 4 percent during the first month of the current fiscal year due to negative economic indicators, high interest rates, and shortage of utilities.
LSM already had presented poor performance during the last fiscal year and registered a six-year lowest growth of 3.76 due to the political uncertainty, power shortage, and deteriorating law and order situation.
The performance of the manufacturing sector had been impressive during the last five years, as it had posted an average growth over 10 percent per annum since 2003. However, the battles on political front, poor law and order situation, and negative economic indicators have pushed the LSM growth in a downward side.
The Federal Bureau of Statistics (FBS) on Tuesday informed that the Quantum Index Number of LSM industries shows a negative trend of some 3.85 percent during July 2008 as compared to July 2007.
The Quantum Index Number of LSM industries stood at 196.64 points in July 2008 as compared to 204.52 points in July 2007. Official provisional statistics of Quantum Index Numbers of Large Scale Manufacturing Industries (QIM) of FBS depicting the production of major industries in the country have not been growing.
QIM shows the industrial productivity of the 100 items received from different sources ie Oil Companies Advisory Committee (OCAC), Ministry of Industries & Production and Provincial Bureaus of Statistics. The OCAC supplied the data of 11 items, the Ministry of Industries & Production supplied the data of 35 items and Provincial Bureaus of Statistics provided data for 54 items.
Major share in present negative growth has contributed by OCAC, as during the July 2008 OCAC index have declined by 5.14 percent to 173.94 points from 183.37 points while, the ministry of industries index has dipped by 3.35 percent to 185.25 points.
The LSM growth during July 2008 also has registered a decline of 7.21 percent in growth, when compared to June 2008. As in June 2008 QIM stood at 211 points. Economists said that poor law and order situation, high interest rates, shortage of power and other utilities are the major contributors to the slow growth of LSM in last fiscal year and in July 2008. The production of petroleum products has decreased by 5.14 percent during July. In addition the production of cigarettes, soda ash, motorcycles and tractors registered a growth of 20.30 percent, 0.36 percent, 1.40 percent and 10 percent, respectively during the first month of the current fiscal year.