KARACHI: The Large Scale Manufacturing (LSM) in April plunged 41.89 per cent year-on-year as almost all of the major manufacturing sectors posted negative growth, data released by the Pakistan Bureau of Statistics (PBS) showed on Thursday. The textile, top contributing sector to the overall big industry output, fell 64.20pc, followed by food, beverages and tobacco, down 23.24pc, coke and petroleum products 51.50pc, iron and steel products 88.96pc and non-metallic mineral products 17.36pc.

Of the 11 sectors under the Oil Companies Advisory Committee, 10 showed negative growth. The Ministry of Industries also reported across-the-board declines barring only the fertiliser sector, which witnessed 9.57pc growth during the month under review.

Data from the Bureau of Statistics showed production of essentials including soaps and detergents, ghee, cooking oil and tea witnessed slight growth during the period with the remaining sectors witnessing sharp contraction.

The government’s directions to enforce a total lockdown during the month of April after the emergence of Covid-19 forced manufacturers to shut down production.

The closure of local as well as international markets also led to cancellation of orders.

Cumulatively, during the first ten months of the current fiscal year, the LSM declined by 8.96pc.

Even before the pandemic, the big industry output had remained depressed as the government slashed development spending after it signed an extended fund facility with the International Monetary Fund.

During the July-March period, the LSM witnessed a decline of 5.4pc as the production index fell from 145.54 to 137.68 points.

This was before the Covid-19 pandemic had gripped the economy. The situation was further aggravated by high interest rates.

The State Bank of Pakistan had increased the interest rates up to 13.25pc in order to rein in inflation. The high costs led to a reduction in private sector borrowing, slowing down the overall economic activity in the country.

Published in Dawn, June 19th, 2020