By Abdul Ghani
ISLAMABAD— Pakistan’s large-scale manufacturing (LSM) sector is finally bouncing back after years of slow growth, according to the Finance Division’s Monthly Economic Update & Outlook – September 2025.
Even after devastating floods in July that disrupted transport and supply chains, most industries showed positive growth in the early months of FY2026.
The report shows that LSM grew 9.0 percent year-on-year in July 2025, with a month-on-month increase of 2.6 percent compared to June. Out of 22 industrial groups monitored, 16 reported growth, showing that the recovery is broad and not limited to a few sectors.
Automobiles Drive the Comeback
The automobile industry was the star performer. Car production jumped a massive 100.9 percent, while trucks and buses grew 69.5 percent. Jeep and pickup production also rose by 50.1 percent compared to last year.
Analysts say this growth comes from pent-up demand, better supply of parts, and renewed investor confidence in the auto sector.
The cement sector also had a strong start. In July–August FY2026, total cement dispatches reached 7.847 million tonnes, up 20.9 percent from last year. Domestic shipments were 6.090 million tonnes, a 14.2 percent increase, while exports surged 51.3 percent to 1.757 million tonnes. The jump in exports shows rising demand in regional markets and hints that Pakistani cement producers are becoming more competitive internationally.
Textiles, wearing apparel, coke and petroleum products, non-metallic mineral products, and pharmaceuticals also posted growth. Together, these sectors are boosting industrial momentum, which could support overall GDP growth in FY2026.
Challenges and Outlook
The Finance Division noted that this revival comes despite floods and other climate-related challenges, showing the resilience of Pakistan’s industries. Investor confidence is also rising, reflected in bullish stock market trends in August 2025.
Sustaining this recovery will depend on stable policies, consistent energy supply, and fast rehabilitation of flood-affected areas.
Still, the strong early performance in autos, cement, and textiles points to a positive outlook for Pakistan’s industrial growth in FY2026.
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