KARACHI (ABC) — Industrialists have hailed the uptick in large scale manufacturing (LSM), which they said would help boost the national economy.
LSM remained adversely affected in the last two years after the country faced the worst economic crisis due to external and internal factors. However, LSM has shown signs of recovery in the last few months.
According to official data, LSM industries recorded a significant uptick in production in January 2024, marking a 21-month high.
Notably, sectors such as agriculture, petroleum products, textiles, and pharmaceuticals are among those witnessing a gradual surge in output.
Talking to WealthPK, Johar Qandhari, President of the Korangi Association of Trade and Industry (Kati), expressed satisfaction over the recent uptick in production within the large-scale manufacturing sector.
While acknowledging the positive impact of increased production, particularly on the textile sector, he called for maintaining the upward momentum.
Johar emphasised that Pakistan’s production costs remained significantly higher than those of the other countries in the region.
He underscored the urgent need for cost-reduction measures to sustain and bolster industrial activities.
The Kati president pointed out that the industrial sector faced challenges stemming from escalating electricity and gas prices, exacerbating operational difficulties for businesses.
Expressing apprehension, he raised concerns over the International Monetary Fund’s proposal to further hike the gas prices.
Asserting the vital role of industrial development in fostering economic development, Johar stressed the imperative of lowering production costs and interest rates.
He urged the government to engage in dialogue with industrialists to address the issue of electricity and gas prices promptly, thereby facilitating economic stability.
Zubair Ahmed, a prominent business leader in Hyderabad, said that initiatives spearheaded by the Special Investment Facilitation Council had played a pivotal role in driving growth across various sectors, particularly agriculture and textiles.
He said the availability of accessible credit to the private sector had been instrumental in fostering positive indicators within industrial domains, consequently propelling overall economic growth.
“These developments underscore a promising outlook for Pakistan’s industrial landscape, signalling a positive trajectory for economic prosperity in the foreseeable future.”
The industrial sector is considered the backbone of a country’s economy. Pakistan’s industrial sector contributed 12.4% to the GDP in 2022. It has been divided into three tiers – LSM, Small Scale Manufacturing and Slaughtering.
LSM dominates the manufacturing sector, contributing around 9.2% to the GDP, and accounting for 74.3% of the sectoral share.
As per the experts, the country’s LSM sector has the potential to significantly increase exports by using information technology solutions to help the country get out of its current economic situation.
Ahmed, the business leader, said that the LSM sector, particularly its agricultural segment, currently faces numerous challenges, including outdated technology, low productivity, and insufficient resources for investment in research and development.
“However, these issues can be addressed using IT technologies, like drones and satellites, water and soil sensors and precision farming in agriculture.”