Home / This Week / Research / Fiscal review of small and large scale manufacturing

Fiscal review of small and large scale manufacturing

Research studies reveal that the manufacturing plays a vital role in any economic development as it has multiplier impact on growth through value addition. In Pakistan, the overall manufacturing sector contributes 13.6 percent in Gross Domestic Product (GDP). The economic adepts also calculated that it has three sub sectors like Large Scale Manufacturing (LSM), Small Scale Manufacturing and slaughtering as well. Presently LSM sector has 80 percent share in manufacturing and 10.8 percent share in GDP whereas Small Scale Manufacturing has 13.8 percent share in manufacturing and 1.9 percent in GDP, while Slaughtering has 6.5 percent share in manufacturing and 0.9 percent share in GDP.

Presently the Pakistan Bureau of Statistics (PBS) revealed that LSM index entered negative growth of 3.33 percent year-on-year (YoY) in August. The statistics show that the fall in big industrial production in August has caused fears that economic growth in Pakistan may slow down.


July recorded a meagre rise of 0.5 percent YoY. It is also hoped that the China Pakistan Economic Corridor (CPEC) boost the manufacturing sector of Pakistan. The experts mention that the governments of both Pakistan and China had accepted that under the second phase of China Pakistan Economic Corridor (CPEC), nine Special Economic Zones (SEZs) would be built in all the four provinces, Gilgit Baltistan, FATA, and Azad Jammu and Kashmir to increase industrialization in Pakistan. It is also said that the government of Pakistan would facilitate many domestic and foreign investors to organize their industries in dissimilar sectors. The experts also mentioned that the construction of industries in these SEZs would not only assist rise in economic activities in Pakistan but also help increase country’s export besides creating hundreds of thousands career opportunities.

The economic expert also mentioned in a statement that during 2017-18, the LSM registered a growth of 5.4 percent YoY by missing the target of 6.3 percent. Between July-August, the growth dropped 1.17percent YoY. Sources mentioned that the negative growth is chiefly the outcome of dip in production of petroleum products 13.96 percent, followed by non-metallic mineral products 13.91 percent, automobiles 12.82 percent, fertilizers 9.98 percent, pharmaceuticals 6.86 percent, iron and steel products 5.1 percent, chemicals 0.42 percent, textile 0.1 percent and wood products plunged 57.98 percent, respectively.


The sector constitutes 80 percent of manufacturing and 10.7 percent of the overall GDP. In comparison, small-scale manufacturing accounts for just 1.8 percent of GDP and 13.7 percent of manufacturing. The production statistics of 36 items acquired from the Ministry of Industries and Production explained a negative growth of 3.27 percent in August.

Furthermore, 65 items recorded by the provincial bureaus of statistics registered slight growth of 0.96 percent. Statistics of 11 items received from the Oil Companies Advisory Committee contributed pessimistically 1.02 percent to LSM fall in August. Economist experts of Pakistan also mentioned that the industry-specific facts explained that engineering products registered the highest rise of 10.30 percent, followed by food, beverages and tobacco products 9.83 percent, paper and board 7.72 percent, electronic products 5.48 percent, leather products 2.19 percent, and rubber products 1.23 percent.
On the other hand, in the automobile sector, the production of all vehicles entered pessimistic growth during August, as against to the corresponding period a year ago.


Tractors went down 16.41 percent, jeeps and cars 4.85 percent, motorcycles 19.46 percent, light commercial vehicles 8.42 percent, trucks 40.89 percent and buses shrank by 18.18 percent during the year under review. It is also revealed that fall in the chemical sector was chiefly driven by paints and varnishes, which registered a drop of 3.19 percent, whereas caustic soda went up by 15.59 percent.
In pharmaceuticals, syrups, tablets capsules and injections went down by 4.42 percent, 7.34 percent, 11.5 percent and 9.47 percent, respectively. In non-metallic mineral products, cement recorded a negative growth of 14.10 percent.

Food, beverages and tobacco segment recorded a fall across the board in the second month of the present fiscal year. A 6.11 percent fall was registered in cooking oil production, followed by blended tea 2.91 percent, wheat and grinding mill 2.08 percent. A meagre growth of 0.39 percent was registered in vegetable ghee.

Check Also

Market Indicators

Market Indicators

Market indicators are a series of technical indicators used by traders to predict the direction …

Leave a Reply