An Overall Cursory Look at LSM Sector’s Performance

Engineering Post Report

Manufacturing sector had remained sound and resilient during  FY2021 on the back of well in time federal government initiatives despite the concerns raised by pandemic of COVD-19 countrywide.

Federal government’s well thoughtful decision to resume the business activities  and adoption of smart lockdown boosted the business sentiments and resultantly the national economy  gained traction  after witnessing  a hefty  decline in FY2020.

Targeted fiscal and monetary incentives  accompanied by  related support packages  helped  speed up the economic recovery. Situation  had also further  ameliorated  by  depreciation of US dollar against Rupee  and launch of COVID-19  vaccine .

During July 2020-March 2021, for which the information has become available from official sources concerned, manufacturing sector in the country had bounced back and Large Scale Manufacturing (LSM) posted 9.0 per cent growth while there was 5.1 per cent  contraction in the  same period during the last year.

The LSM  expansion is broad based, reflecting production increase in major manufacturing sectors. This is the highest period-wise growth since FY2007 supported by promising performance of Textile, Food Beverages & Tobacco and Automobile. Construction Package of the Prime Minister  has also supported well all other allied  industries such as increased  cement dispatches and iron and steel production in the country.

On year-on-year (Y-o-Y) basis, LSM was exhibiting  positive trajectory  since July FY2021 which indicated that the federal government’s proactive role had not only catered the pandemic adversities  but also rather made LSM to outperform  its pre-COVID-19 level.

LSM as such had increased by 22.4 per cent in March FY2021 against 21.7 per cent decline in the same month last year which was the time when pandemic had started  hitting business activities . It was indeed encouraging to not that Y-o-Y performance of LSM was improving  as compared to previous years as well. Month-on-Month (M-o-M) performance  had also been satisfactory  as LSM  showed  2.9 per cent average growth during current financial year.

Briefly , manufacturing sector  has been a major contributor in sustaining growth rate during FY2021.

Group wise performance analysis of LSM will be submitted later, please.