Page 82 - CMA Journal (May-June 2025)

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Key Global Rankings and Indexes Tracking Construction & Mining Sectors - Construction activity
Pakistan’s LSM Competitiveness declined by 9.3% in H1-FY2025 whereas Mining and
quarrying contracted by 5.7% in Q2-FY2025.
1) HBL Pakistan Manufacturing PMI – June 2025 -
Industrial Contribution to GDP
Pakistan’s manufacturing sector continued to expand
• Manufacturing added +1.0 percentage point
in June 2025, with the PMI recorded at 50.5—the
lowest in 10 months and just above the neutral mark of • Construction subtracted –1.3 percentage points
50. This decline from 51.1 in May and 52.7 in April • Mining & Quarrying contributed –0.5 percentage points
reflects a slowdown in output, new orders, • Net industrial contribution (H1-FY2025) stood at –0.4
employment, and input purchases. While the sector percentage points
remains in expansion territory, growth momentum has Future Outlook of LSM Sector
weakened. Supplier delivery times also worsened due
Pakistan’s Large-Scale Manufacturing (LSM) remained
to ongoing global shipping and logistics challenges.
sluggish in FY2025, lagging behind regional peers.
2) UNIDO Competitive Industrial Performance (CIP)
• India recorded 3.4% manufacturing growth,
Index - According to the latest available data,
contributing 15–17% to GDP.
Pakistan ranked 80th out of 153 countries in the 2021
UNIDO CIP Index—a measure of global industrial • Bangladesh’s manufacturing share reached 22.7%,
competitiveness. As of March 2025, Pakistan’s Total fueled by double-digit growth in garment exports.
Manufacturing Index reached 115.39, posting a • In contrast, Pakistan’s textile exports stagnated,
0.35% month-on-month increase. However, it reflecting declining competitiveness.
remained 1.17% lower compared to March 2024, High-tech manufacturing contributed only 1.43% of
indicating limited improvement in long-term exports, placing Pakistan 91st in the Global Innovation
industrial performance. Index 2024. Despite its “innovation overperformer” tag,
3) PBS Quantum Index of Large-Scale industrial innovation remains weak.
Manufacturing (QIM)- April 2025 - The QIM, which The State Bank projected 2.5–3.5% GDP growth for
tracks changes in industrial production volumes, rose FY2025, led by agriculture. However, LSM contraction,
to 108.37 in April 2025, up 2.29% year-on-year from energy shortages, price volatility, and low investment
April 2024. However, the index declined by 3.2% continue to weigh down industrial recovery. A rebound
compared to March 2025. Over the first ten months of depends on macroeconomic stability, easier credit, and
FY24–25 (July–April), large-scale manufacturing stronger external demand.
output contracted by 1.52%, highlighting persistent
cost pressures and weak domestic demand. Way Forward – Key Priorities
Current Overview of Industrial Sector • Raise R&D Spending from 0.25% of GDP, aligning
with models like South Korea (4.9%).
(FY2024–25)
• Strengthen applied research and university–
Pakistan’s industrial sector remained under pressure
industry ties, as in Finland.
during FY2024–25, reflecting a mix of modest growth in
manufacturing and sharp contractions in key sub-sectors. • Expand technical training using Germany’s dual-
In FY2023–24, the sector grew by 1.21%, largely education model to boost workforce productivity.
supported by manufacturing (2.42%) and construction • Adopt Industry 4.0 technologies—automation, AI,
(5.86%), though LSM slightly declined by –0.03%. IoT—for smarter manufacturing.
LSM Trends - During July–March FY2025, LSM output • Ensure reliable energy and digital infrastructure,
contracted by 1.47% YoY. In March 2025, LSM showed following Vietnam’s export-driven strategy.
1.79% YoY growth, but fell 4.6% MoM, reflecting continued
• Implement the National Industrial Policy 2023
volatility. Growth was observed in several LSM subsectors:
with a focus on industrial clusters and eco-zones, as
• Automobiles: +42.2% (notably +202% LCVs, +99%
in China.
trucks, +37.5% cars)
• Textiles: +2.99% • Diversify exports into electronics and technical
textiles, inspired by Malaysia’s model.
• Coke & Petroleum: +5.01%
• Pharmaceuticals: +2.81% • Revive long-term industrial financing, drawing on
India’s SIDBI experience.
Cement Sector - Cement dispatches reached 37.3 million
tons (Jul–Apr FY2025), marginally down by 0.3%. • Stabilize currency, simplify regulations, and improve
Domestic sales fell by 5.6% while exports of cement rose export procedures like Bangladesh and Kenya.
by 24% to 7.13 million tons.
80 ICMA’s Chartered Management Accountant, May-June 2025