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LSM grows by 9.7 percent

RECORDER REPORT


KARACHI (January 19 2007): Large Scale Manufacturing (LSM) has grown up by 9.7 percent during the first quarter (July-October) of the current fiscal year, as compared to 8.8 percent during the same period last year. According to the State Bank of Pakistan (SBP) first quarter report, issued on Thursday.

The LSM growth acceleration is not broad-based and growth in the LSM during the first quarter is primarily due to acceleration in the production in textile, electronics, chemicals and metal industries.

The electronics sub-sector recorded an extraordinary 41.6 percent growth during the first quarter. This sector grew by 9.2 percent during the same period last year.

The report said and added that strong income growth, better access to credit, and the efforts of power utilities to modernise and extension in their distribution networks are the main factors behind the extraordinary performance of the electronics sub-sector.

The report said that the growth in the textiles sub-group also rose to 12.4 percent during July-October 2006 as against a decline of 0.9 percent in the same period last year. This growth in textile sub-group is the second highest for any first quarter during the last six years.

The growth recorded in textile production appears to be supported by the acceleration in the growth of the chemical sub-sector to 10.1 percent during first quarter of 2007 as compared with 8.2 percent growth during same period of last fiscal year. Production in the metals sub-sector also grew by 14.5 percent during July-October against the 4.1 percent decline during the same period last year.

The improvement can be attributed to the streamlining of production by Pakistan Steel after completion of repairs of its coke oven batteries in the last quarter of FY06.

During the July-October the automobiles sector registered lowest growth during the last six years, which is only 11.1 percent compared to a strong growth of 33.1 percent in the same period of the preceding year, report added.

The production of fertiliser also fell in July-October, dropping by 1.7 percent as against a rise of 3.7 percent growth during the same period of the preceding year. This decline was mainly due to capacity constraint as well as lower demand on the back of untimely rain and an anticipated subsidy announcement by the government, report concluded.


Copyright Business Recorder, 2007