According to the Pakistan Bureau of Statistics, Pakistan's Large Scale Manufacturing (LSM) sector saw a decline of 1.87% year-on-year in the first half of Financial Year (FY) 2024-25. This negative trend has persisted since August 2024 with the only exception being a brief uptick in October. Various global and domestic factors such as economic pressures and inflation have contributed to this slowdown which became evident starting June 2024.

While there were some periods of growth like a 2.38% increase in July 2024, the overall picture remains discouraging. The sector ended FY 2024 with a slight contraction of 0.03% which is a stark contrast to the previous year’s 0.92% growth. This reflects the difficulties industries are facing from rising costs to fluctuating global demand.

Sectoral Growth and Declines Amid LSM Struggles

Some industries showed positive growth despite the overall downturn within the broader LSM sector. The food sector grew by 0.85% in the first half of FY 2025 driven by improvements in wheat and rice milling which increased by 5.74%. However, other food related categories like vegetable ghee, cooking oil, and blended tea saw declines that points to change consumer preferences and production hurdles.

The textile industry showed better performance growing by 2.14% in the first half of FY 2024-25. Key products like cotton yarn and cotton cloth contributed to this growth and exports of garments rose by 9.53%. This boost in textile exports was largely due to foreign buyers shifting from Bangladesh to Pakistan that highlighted the demand for Pakistani textiles in international markets.

Automobile and Industrial Production Show Mixed Results

The automobile industry saw a notable recovery with a 50.16% rise in production during the first half of FY 2024-25 particularly in cars, jeeps and light commercial vehicles (LCVs). However, diesel engine production declined due to ongoing issues such as high prices and limited financing options that are dampening consumer interest in new vehicles.

On the other hand, the iron and steel sector faced significant challenges with a 12.04% drop in production. The biggest hit came from billets and ingots which saw a sharp 28.70% decline largely due to reduced demand from the construction industry. This downturn reflects the broader struggles industries are facing amid economic uncertainty both at home and abroad.