Abdul Ghani

Pakistan’s large-scale manufacturing (LSM) sector is showing signs of gradual recovery, with key industries posting robust growth after a sluggish FY2025, according to the Ministry of Finance’s Monthly Economic Update and Outlook for August 2025, exclusively available with Wealth Pakistan.

In June 2025, the LSM output rose 4.1% year-on-year, although it dropped 3.7% month-on-month. Overall, the sector recorded a slight contraction of 0.74% in FY2025 compared with marginal growth of 0.78% in FY2024.

Out of the 22 sectors monitored, 12 showed positive growth, including textiles, wearing apparel, coke and petroleum products, beverages, and pharmaceuticals. The automobile sector posted particularly strong gains in July 2025, with production of cars up 49%, trucks and buses up 40.1%, and jeeps and pickups up 34%.

Cement demand also rebounded, with dispatches rising to 3.99 million tonnes in July, a 30.1% increase from last year. Domestic sales climbed 18.4% to 2.98 million tonnes, while exports jumped 84.2% to 1.01 million tonnes.

The report also highlighted growth in agriculture-linked industries. Agricultural credit disbursement grew 16.3% in FY2025 to Rs2.58 trillion, while imports of agricultural machinery surged 123.9% in July 2025. Fertilizer demand was mixed, with urea up 2% but DAP slightly down by 0.7%.

The ministry report noted that LSM is expected to continue improving in FY2026, supported by higher domestic demand, export orders, and government measures to boost private-sector-led growth. However, risks remain due to global uncertainty and rising energy costs.

Credit: INP-WealthPk