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Pakistan: LSM Registers 4.84 Percent Growth in Fiscal Year 2010
Source: brecorder.com
Source Date: Saturday, August 21, 2010
Focus: Institution and HR Management
Country: Pakistan
Created: Aug 23, 2010

The Large Scale Manufacturing (LSM) posted a modest recovery of 4.84 percent growth during fiscal year 2009-10 because of re-entry of commercial banks in consumer financing and rising global demand. The performance of the manufacturing sector was very poor during fiscal year 2009, as it posted a negative growth of 8 percent followed by weakness in domestic demand, power shortages and deterioration in law & order situation.

Economists said that LSM growth gathered pace due to rising domestic consumption as well as global recovery and re-entry of commercial banks in consumer financing helped strengthen the demand for consumer durables, especially automobiles, despite rising cost of production. Moreover, export-based industries, particularly value-added textile, finally picked up in response to improved global demand as well as domestic policies, they added.

However, they said that in specific terms, supply of energy would be a major determinant of capacity utilisation in going forward and sustaining a decent growth in LSM may be constrained due to energy insufficiency in the country. According to statistics release by Federal Statistics Bureau (FBS), LSM growth during the last fiscal year 2010 was satisfactory and it registered a growth of 4.84 percent. Official provisional statistics of Quantum Index Numbers of Large Scale Manufacturing Industries (QIM) of FBS depicting the production of major industries in the country have not been growing.

LSM is the one of the major indicators of the economy, which shows the industrial productivity of the 100 items received from different sources ie Oil Companies Advisory Committee (OCAC), Ministry of Industries & Production and Provincial Bureaus of Statistics. OCAC supplied the data of 11 items, Ministry of Industries & Production supplied the data of 35 items and Provincial Bureaus of Statistics provided data for 54 items. With a growth of some 5 percent, overall QIM reached 205.98 points in June 2010 from 196.48 points in June of last fiscal year.

Major share in this growth was contributed by Provincial Bureaus of Statistics, as during the last fiscal year its had gone up by 9.49 percent from 209.66 points to 229.56 points, while industries' index grew by 3.16 percent to 199.45 points. However, industries index declined by 7.68 percent to 146.99 points at the end of last fiscal year as compared to 159.22 points in fiscal year 2009. During June 2010, LSM witnessed a growth of 4.55 percent to 212.86 points as against 203.60 points during the same period of the last fiscal year.

Economists said that poor law and order situation, high interest rates, shortage of power and other utilities are still a major threat to the growth of LSM and if the government did not take appropriate action to solve these issues, the improving growth would again be constrained.
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