A look at Industrial Sector’s Performance

Engineering Post Report

Industrial sector performance is more dependent on Large-Scale Manufacturing (LSM) as it holds as much as 51 per cent share in Industry whereas LSM is reflected by Quantum Index of Manufacturing (QIM) data. Since July 2020, QIM was posting significant year on year (YoY) growth. Thus its growth is building on momentum by capacity utilization, monetary incentives in the form of low interest rate and other facilitations.

In March and April last year, the international and domestic spread of the COVID-19 virus had depressed industrial activity, thus QIM index had declined Month on Month (MoM) by 32.7 per cent in March 2020 while in April 2020, it reached to the lowest level of 85.6 per cent showing a YoY decline of 41.6 per cent.

In National Accounts, according to the information received from official sources concerned, growth of QIM had registered 9.3 per cent growth for FY 2921 on the standard methodology of Pakistan Bureau of Statistics.

In case of Small Scale, the federal government had provided Rs 6.9 billion to support the Small and Medium Enterprises (SMEs). Further, the Prime Minister had also approved the National SME Policy Action Plan 2020 to provide much needed support to SMEs. Thus growth in Manufacturing was recorded 8.7 per cent on account of growth in LSM, SMEs and Slaughtering. The other sector which showed significant growth was Construction, which recorded a growth of 8.3 per cent due to increase in general government spending (26 per cent). Further the contribution of this sector was derived from investment of different construction activities.

Mining and Quarrying posted a decline of 6.5 per cent due to decrease in production of gas and crude oil by 4.7 per cent and 6.7 per cent respectively. Likewise, electricity and Gas sub-sector also showed a negative growth of 23 per cent, mainly due to the decline in subsidy and increase in intermediate consumption of WAPDA and Independent Power Producers (IPPs).