Farooq Awan

Pakistan’s industrial sector showed a broad-based recovery during the first five months of the current fiscal year, with Large-Scale Manufacturing (LSM) registering around 6 percent growth, signalling renewed momentum in production activity across major industries.

According to the Monthly Development Update (February 2026) issued by the Economic Policy Wing of the Ministry of Planning, Development and Special Initiatives, LSM output expanded by approximately 6.0 percent during Jul–Nov FY2025-26, marking a strong turnaround from the same period last year when the sector had contracted by 1.4 percent.

The improvement reflects a shift from negative to positive territory, suggesting that industrial operations have stabilized after earlier slowdowns. The recovery was not confined to a few segments but spread across a wide range of subsectors, indicating strengthening demand and improved production capacity.

The report highlights that 16 out of 22 major industrial groups recorded positive performance during the period. Key contributors included food processing, textiles, wearing apparel, non-metallic mineral products and automobiles. The automobile sector, in particular, showed a pronounced rebound, helping lift overall manufacturing output.

Textiles and related industries continued to play an important role in supporting industrial growth, given their established share in the country’s manufacturing base. Steady activity in these sectors provided consistency to the broader recovery, while gains in other industries added further momentum.

The expansion in LSM suggests that factories and production units are operating more actively compared with last year. Higher output levels generally indicate improved business confidence, better utilization of installed capacity and increased market demand for manufactured goods.

The Planning Commission’s assessment links the recovery to improving macroeconomic conditions and greater stability in the business environment. As economic pressures ease, industrial enterprises are better positioned to resume operations, manage costs and plan production schedules more effectively.

A rebound in manufacturing also carries wider implications for the economy. Industrial activity supports supply chains, generates employment opportunities and stimulates demand for raw materials and services. Growth in this sector therefore tends to have multiplier effects across related industries.

The report notes that sustained improvement in manufacturing performance will depend on maintaining stable economic conditions and ensuring consistent availability of inputs and infrastructure. Continued support for industrial sectors can help reinforce the positive trajectory observed this fiscal year.

Compared with last year’s contraction, the 6 percent expansion marks a notable recovery milestone. The turnaround indicates that the industrial base is regaining strength and contributing more actively to overall economic activity.

With a majority of subsectors posting gains, the latest data point to a broad and durable improvement rather than a temporary uptick. If the current pace continues, manufacturing is expected to remain a key driver of economic stability and growth through the remainder of FY2025-26.

Credit: INP-WealthPk