JS Securities Limited - JS Research.

Karachi -- September 23, 2022 (PPI-OT)

LSM posts negative growth first time in almost 2 years

Large-scale manufacturing (LSM) posted a negative growth of 1% YoY in Jul-2022, crossing over to the red zone for the first time in almost two years.

Consolidation measures, energy shortages in certain segments and scarcity of imported raw materials continue to be key challenges to the LSM segment.

Moreover, we believe higher costs of production post increase in energy tariffs, higher dollar against the PKR and high interest rate environment would add pressures in the coming months, added by post-flood repercussions.

Jul-2022 LSM clocks in at -1% YoY

Large-scale manufacturing (LSM) posted a negative growth of 1% YoY in Jul-2022, crossing over to the red zone for the first time in almost two years. The growth is the lowest in 23 months, where the last time Pakistan witnessed a negative YoY growth in LSM was during the pandemic when plant and machinery of various segments shut for a brief time over COVID protocols.

The longer list of segments with negative growth outweighed handful segments that witnessed YoY growth during July. Among the heavyweight, Textile, Food and POL products were...