By Moaaz Manzoor

Pakistan’s large-scale manufacturing (LSM) sector recorded a growth of 4.8 percent during July–December FY2025-26, marking a recovery from the 1.8 percent contraction observed during the same period of the previous fiscal year, according to the Monthly Development Update released by the Ministry of Planning, Development and Special Initiatives.

The report highlights that the improvement in industrial output reflects a gradual recovery in manufacturing activity during the first half of the fiscal year as macroeconomic conditions begin to stabilize.

Industrial performance during the period was also reflected in the Quantum Index of Manufacturing (QIM). According to the report, the index increased to 128.5 in December 2025, indicating improved manufacturing activity. The index recorded a year-on-year growth of 0.4 percent and a month-on-month increase of 9.3 percent, suggesting an upward trend in industrial production during the period.

The report further notes that the recovery in the LSM sector was supported by growth across multiple manufacturing industries. Out of the 22 sectors included in the LSM index, 14 sectors recorded positive growth, reflecting a broad-based improvement in industrial activity.

Among the sectors contributing to the expansion, the food sector recorded a growth of 10.6 percent, while tobacco production increased by 8.7 percent during the review period. The wearing apparel sector expanded by 7.5 percent, and the textile sector posted growth of 1.5 percent, indicating improved output in key export-oriented industries.

Several other manufacturing segments recorded notable increases during the period. Non-metallic mineral products registered a growth rate of 510.5 percent, while the automobile sector recorded a significant increase of 967.2 percent.

The report notes that the recovery in LSM was also reflected in industries linked to construction and infrastructure activity. Construction-related industries showed notable momentum during the period, indicating improving economic activity.

Overall, the Ministry of Planning’s update indicates that Pakistan’s industrial sector showed signs of recovery during the first half of the fiscal year as multiple manufacturing industries recorded growth following the contraction observed in the previous year.

The improvement in manufacturing activity forms part of broader developments in the country’s macroeconomic landscape during FY2025-26, which the report assesses through indicators including inflation trends, industrial production, trade performance and remittance inflows.

Credit: INP-WealthPk