KARACHI: The production of large-scale manufacturing (LSM) industries declined by 10.26 per cent year-on-year in the fiscal year 2023, according to the data released by the Pakistan Bureau of Statistics on Tuesday.

The LSM sector, which accounts for about 80 per cent of the industrial output, witnessed a sharp contraction of 14.96pc in June, marking the 10th consecutive month of negative growth in the outgoing fiscal year. The main reason for this slump was the reduced output of textile and clothing sectors, which are the major export earners for the country.

The downturn in LSM had a severe impact on the employment situation, as many workers lost their jobs due to the reduced production capacity of the industries. The LSM sector employs about 20 per cent of the total labour force in Pakistan.

The dismal performance of LSM also raises concerns about the overall economic outlook of the country, which is already facing challenges such as high inflation, low growth, and fiscal imbalances.

The LSM sector recorded a 14.37pc decline in May compared to the same month last year. The decline was 21pc in April, which was lower than the 25pc fall in March, 11.6pc in February, and 7.9pc in January. In December 2022, there was a slight decrease of 3.51pc.

In November 2022, there was a negative growth of 5.49pc, while in October 2022 it dropped by 7.7pc. In September 2022, there was a fall of 2.27pc compared to the same month last year. In August, there was a marginal increase of 0.30pc after a decline of 1.67pc in July, which was the first month of FY23.

In FY22, the LSM sector grew by 11.7pc year-on-year. The production estimate for LSM industries was made using the new base year of 2015-16. In FY23, only four out of 24 LSM sectors posted a slight increase in production, while the rest shrank.

The textile sector, which contributes about 60 per cent to the total exports, saw its production shrink by 18.68pc in FY23 over a year ago. The major decline came from yarn (22.09pc), and cloth (12.39pc). The production of garments grew by 27.16pc in FY23.

In the food group, wheat and rice production dipped by 10.31pc, sugar and bakery products by 15.31pc and blended tea by 10.65pc. However, the production of cooking oil was up by 13.57pc and vegetable ghee by 10.64pc, respectively.

Petroleum products posted a negative growth of 13.39pc in FY23, mainly because of a decline in the production of petrol and high-speed diesel while almost all other petroleum products recorded a slowdown except jet fuel, jute batching oil and petroleum products.

The auto sector also saw a 49.99pc slump in FY23 as the production of almost all kinds of vehicles went down except buses and diesel engines.

The production of iron and steel dipped by 5.12pc and pharma products by 28.85pc, rubber items by 4.97pc and fertilisers by 9pc in FY23 from a year ago.