After six months deceleration, the Large Scale Manufacturing (LSM) growth has become positive and posted a growth of one percent during the first seven months of current fiscal year. The momentum in LSM growth, seen in last fiscal year, was upset in the initial months of current fiscal year, as cumulative LSM production declined by 1.57 percent during July-December of fiscal year 2010-2011 compared.
However, increase of credit to private sector has pushed the LSM in positive side and latest statistics of the Federal Bureau of Statistics (FBS) revealed that Quantum Index Number of LSM industries showed 1.03 percent growth in first seven months (July-Jan) of current fiscal year. Quantum Index Number of LSM industries stood at 200.63 points in first seven months of fiscal year 2010-11 as compared to 198.59 points in corresponding period of last fiscal year 2009-10.
The Quantum Index Numbers of Large Scale Manufacturing Industries (QIM) has been computed in the FBS on the basis of latest production data of 100 items received from various 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.
During first seven months, the Ministry of Industries and provincial BOS Index has posted an upward trend, while the OCAC index has still registered negative growth.
Major share in present growth has been contributed by the provincial BOS index, as during the July-January 2010 the provincial BOS index gone up by 2.66 percent to 215.38 points from 209.79 points. While, the Ministry of Industries Index has surged by 0.69 percent to 199.22 points from 197.86 points. In addition, OCAC index has registered a decline of 6.25 percent to 141.04 during the first seven months of current fiscal year. Month on month basis, the QIM has witnessed a growth of 0.83 percent to 225.98 percent from 224.13 percent in January.
"We were already expecting positive growth during the current fiscal year as there was some indication of recovery in consumption on domestic as well as global front but domestic challenges have further disappointed the LSM growth," analysts said. They said that although the LSM has become positive, however, still it is on slow track and needed government attention to speed up the growth.
"High interest rate, rising cost of business, poor law and order situation, political situation and some negative economic indicators are responsible for slow LSM growth during the current fiscal year," they said. Adding that if the current trend continues defiantly would hurt the annual GDP growth target set by the government.