By Farooq Awan

Pakistan’s Large-Scale Manufacturing (LSM) sector expanded by 4.8 percent during July-December FY26, reflecting a broad-based recovery led by automobiles, cement, and petroleum products, according to the Monthly Economic Update & Outlook February 2026 released by the Ministry of Finance.

The report indicates that industrial activity regained momentum during the first half of the fiscal year after a period of contraction in previous months. On a year-on-year basis, LSM recorded a 0.4 percent increase in December 2025, while on a month-on-month basis, output rose sharply by 9.3 percent, signaling a rebound in industrial activity toward the end of the calendar year.

The automobile sector emerged as one of the strongest contributors to the recovery. Production of trucks and buses surged by 92.9 percent during July-January FY26 compared to the same period last year. Car production also recorded significant growth of 57.5 percent, reflecting stronger manufacturing activity in the transport segment.

Cement dispatches showed notable improvement as well. Total cement dispatches increased by 10.6 percent during July-January FY26. Within this, cement exports recorded a strong rise of 61.1 percent, highlighting increased external demand for the product. The growth in dispatches indicates both domestic construction activity and export performance contributed to the sector’s expansion.

Petroleum products also supported industrial output during the review period. The improvement in production of petroleum-related items added to the overall positive performance of the manufacturing sector, strengthening LSM’s contribution to economic activity.

The recovery in key sub-sectors, including automobiles, cement, and petroleum products, played a central role in lifting overall industrial output. The data shows that multiple industries posted gains, contributing to the cumulative 4.8 percent growth recorded in the first half of FY26.

The December performance, particularly the 9.3 percent month-on-month increase, suggests a pickup in production levels toward the latter part of the review period. The year-on-year growth, though moderate at 0.4 percent for December, reinforces the broader upward trend seen across the first six months of the fiscal year.

The report highlights that the LSM sector’s performance during July-December FY26 reflects strengthening industrial activity across selected sectors. The positive growth in manufacturing output indicates improved production dynamics in the economy as the fiscal year progresses.

Credit: INP-WealthPk