Page 83 - CMA Journal (May-June 2025)

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Strategic SWOT Overview of LSM Sector

The following provides a brief overview of the sector using the
SWOT framework and does not represent a detailed analysis.

STRENGTHS WEAKNESSES

 Strong base in textiles, cement, pharma, and  Output declined for three straight years
automotive (–1.9% in Jul–Feb FY25)

 Contributes around 70% of total  Low R&D spending (0.16% of GDP) limits
manufacturing output innovation
 Supported by CPEC infrastructure and energy  High-tech exports only 1.4% of total
projects manufactured exports
 Early signs of recovery in PMI and business  High energy costs and policy instability
sentiment  Underutilized capacity and weak export

 Historical resilience after economic shocks diversification

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SWOT

OPPORTUNITIES O T THREATS

 Growth potential in electronics, renewables,  Energy shortages, global price volatility,
and agro-processing and fiscal pressures
 Adoption of Industry 4.0 (automation, AI, IoT)  Inconsistent tax policies raising input costs

 Manufacturing relocation opportunity due to  Losing competitiveness to regional peers
China+1 trend  High borrowing costs and limited industrial

 Vocational training and public-private credit
partnerships to train workforce  Currency volatility increasing cost of

 SEZs under CPEC can attract FDI and scale imported inputs
production

ICMA’s Chartered Management Accountant, May-June 2025 81