LSM index shows an uphill growth

March 16, 2013

RECORDER REPORT

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The Large Scale Manufacturing (LSM) sector showed a gradual growth of nearly 3 percent during the July-January period of the current fiscal year against the same period of the last fiscal year. Economists said that the ongoing energy crisis and the rising cost of doing business were hampering the growth of large scale manufacturing.

"Although, LSM growth is gradually improving, but the country can achieve a better growth, if the government properly addresses issues such as energy shortages, development of (inadequate) infrastructure and (worsening) law and order (situation)," they said. Urging the government to take serious steps to resolve these issues, they said that a healthy growth in the LSM sector was required to create new job opportunities, besides achieving real GDP growth.

According to Pakistan Bureau of Statistics' (PBS) Quantum Index Numbers, Large Scale Manufacturing (LSM) Industries posted a cumulative growth of 2.73 percent Year-on-Year (YoY) growth during the first seven months of the current fiscal year. With the current surge, the Quantum Index Numbers of LSM industries surged to 111.69 points in July-January period of the fiscal year 2013 against 108.72 points in the corresponding period of the past fiscal year (2012).

The Provisional QIM was computed on the basis of latest production data of 112 items received from sources, including the Oil Companies Advisory Committee (OCAC), Ministry of Industries and Production and Provincial Bureaus of Statistics. OCAC supplied the data of 11 items, Ministry of Industries & Production supplied the data of 36 items and Provincial Bureaus of Statistics (BoS) provided data for 65 items. All three production indices depicted a similar trend during the period under review. However, provincial BoS index was the main driver of the current growth in the LSM sector.

A detailed analysis showed that the provincial BoS index achieved a growth of 1.51 percent, rising to 131.83 points during July-January period of FY13. OCAC posted a growth of 0.65 percent, increasing to 89.71 points and the ministry of industries' index surged to 107.85 points, up by 0.57 percent. The monthly LSM index posted a robust growth of 4.62 percent in January 2013.

The Ministry of Industries' index posted an increase of 2.01 percent, whereas Provincial BoS index stepped up by 1.85 percent and the OCAC index recorded an increase of 0.76 percent In January 2013 against January of last year. Leading sectors such as textiles, food, beverages and tobacco, paper and board, pharmaceuticals, iron and steel products, coke and petroleum products, chemical and rubber products posted a growth during the first seven months of the current fiscal year, while on the other hand production of automobile, fertilisers, wood products, electronics, leather products and engineering products remained depressed.