Report by Engineering Post
Manufacturing sector remain critical to Pakistan’s industrial base substantially contributing to GDP Within the manufacturing sector Large-Scale Manufacturing (LSM) plays a dominant role, accounting for 67.4 percent of the manufacturing sector, and 8.2 percent of GDP, followed by Small-Scale Manufacturing which contribute 2.5 percent to GDP. The manufacturing sector recorded a strong growth in FY 2026, increasing by 6.6 percent, up from just 2.0 percent in the previous year. This improvement was supported by relatively favorable macroeconomic conditions , including easing inflation, lower interest rate, and strengthening external and fiscal sector balances, which collectively created a more supporting environment for industrial activity.
The recovery was broad-based across industrial sub-sectors. LSM rebounded strongly, growing by 6.1 percent against a contraction of 0.7 per cent last year, reflecting improved production and demand conditions. Small-Scale Manufacturing (SSM) maintained its steady momentum with growth of 8.5 percent contributing positively to overall manufacturing progress.
