LSM stalls as steel, fertiliser slump

Sequential decline of 4.96% as transport strike hits wearing apparel, auto taxes dampen sales Large-Scale Manufacturing (LSM) output increased 0.67% in August 2026 compared with August 2025 but declined 4.96% compared with July 2026, according to provisional data released by the Pakistan Bureau of Statistics (PBS). The Quantum Index of Manufacturing (QIM) for August 2026 was estimated at 113.19, against 112.45 in August 2025 and 119.10 in July 2026. Cumulatively, factory activity posted 1.85% growth during July-August 2026-27 compared with the same period last year, with the QIM reaching 116.14 against 114.03 in July-August 2025-26, pointing to a modest improvement in industrial output over the two-month period. According to the PBS, production during July-August 2026-27 increased in tobacco, wearing apparel, wood products, coke and petroleum products, rubber products, non-metallic mineral products, fabricated metal, computer, electronics and optical products, electrical equipment, automobiles, other transport equipment and furniture. However, output declined in food, beverages, textiles and leather products. LSM growth slowed in August due to elevated petroleum prices despite a significant jump in refinery production and continued growth in the automobile sector, AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune. "Sequential decline in wearing apparel due to transportation strike, and lower automobile sales due to increase in taxes and auto policy uncertainty led to decline on a sequential basis," he said. Sector-wise performance Wearing apparel production increased 10.85% in August 2026 compared with August 2025 and registered growth of 16.69% during July-August 2026-27 compared with the corresponding period of the previous year. Coke and petroleum products recorded an increase of 31.85% in August compared with the same month last year. Production in the sector grew 15.48% during July-August 2026-27. Automobile production increased 11.66% in August 2026. The sector posted growth of 32.45% during July-August 2026-27 compared with the same period last year. Cotton yarn production increased 1.46% in August and grew 2.09% during July-August 2026-27. Cotton cloth production recorded an increase of 0.04% in August, while output during the two-month period declined 0.03%. In contrast, fertiliser production declined 9.00% in August. The sector recorded a decrease of 7.55% during July-August 2026-27. Iron and steel production fell 11.56% in August, and output declined 11.48% during the first two months of the current fiscal year. Cement production decreased 3.52% in August 2026, though the sector recorded growth of 1.26% during July-August 2026-27. IT exports Information technology (IT) exports reached $435 million in September 2026, up 18% year-on-year and 10% month-on-month, the second-highest monthly level on record, just shy of an all-time peak. First-quarter exports for FY27 totalled $1.25 billion, registering growth of around 18% year-on-year. Adviser to the Finance Minister Khurram Schehzad noted on X that the momentum reflected targeted incentives in the FY27 budget for the export sector, particularly IT, alongside a strengthening digital economy. He said these were supporting exports, non-debt foreign exchange earnings, high-value jobs and Pakistan's integration with global markets. According to Topline Securities, the monthly figure was a nine-month high, up 19% year-on-year. IT exports during 1QFY27 stood at $1.25 billion, while the trailing 12-month value reached $4.8 billion, reflecting 20% year-on-year growth from $4.0 billion in the corresponding period last year.