Abdul Ghani

Pakistan’s large-scale manufacturing (LSM) sector, which faced prolonged stagnation in recent years, is showing signs of broad-based recovery, according to the Monthly Economic Update & Outlook – September 2025 released by the Finance Division.

Despite the damaging floods that disrupted transport and supply chains in July, most industries reported positive growth in early FY2026.

The report highlights that LSM recorded a strong year-on-year growth of 9.0 percent in July 2025, along with a month-on-month expansion of 2.6 percent compared to June. Out of 22 monitored industrial groups, 16 posted growth, underscoring a broad-based rebound across multiple sectors.

Automobiles emerged as the star performer. Car production rose by an astonishing 100.9 percent, while trucks and buses recorded a 69.5 percent increase. Production of jeeps and pickups jumped by 50.1 percent compared to last year. This resurgence reflects pent-up demand, improved supply of parts, and greater investor confidence in the auto industry.

The cement sector also delivered a robust performance. In July–August FY2026, cumulative dispatches stood at 7.847 million tonnes, up 20.9 percent from last year. Domestic dispatches totaled 6.090 million tonnes, a 14.2 percent increase, while exports rose sharply by 51.3 percent to 1.757 million tonnes. The surge in cement exports signals growing demand in regional markets and suggests that Pakistan’s cement producers are regaining competitiveness abroad.

Other sectors showing positive growth included textiles, wearing apparel, coke and petroleum products, non-metallic mineral products, and pharmaceuticals. Together, these industries contributed to the industrial momentum that is expected to support overall GDP growth in FY2026.

The Finance Division noted that the LSM revival comes despite severe climate-related disruptions, highlighting the resilience of domestic industries. The rebound is further supported by rising investor confidence, as reflected in the bullish stock market trends during August 2025.

Going forward, sustaining this momentum will hinge on stable policies, uninterrupted energy supply, and timely rehabilitation of flood-hit areas. Nevertheless, the strong early performance of autos, cement, and textiles signals a positive outlook for industrial growth in FY2026.

Credit: INP-WealthPk