ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s industrial sector continued to strengthen in the first quarter of FY2026 as large-scale manufacturing (LSM) grew by 4.4 percent, supported by strong performances in automobiles, construction materials, and electrical goods.
Key sector performance
According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), twelve major industries recorded positive growth during July–August FY2026. These included wearing apparel, non-metallic mineral products, food processing, electrical equipment, automobiles, and tobacco manufacturing.
In August 2025 alone, LSM grew 0.5 percent year-on-year, although output declined by 2.7 percent month-on-month due to seasonal adjustments and short-term supply constraints.
Automobile and construction boost
The automobile sector showed remarkable growth, with car production up 74 percent, trucks and buses up 105 percent, and jeeps and pickups up 48.7 percent during July–September. The surge was linked to improved supply chains, easing import restrictions, and rising consumer demand.
The construction industry also showed solid momentum. Cement dispatches rose 16.2 percent to 12.2 million tonnes in Q1-FY2026. Domestic consumption increased 15.1 percent, while exports jumped 20.8 percent to 2.6 million tonnes, reflecting strong infrastructure and housing activity.
Broader manufacturing recovery
The Finance Division said these indicators reflect renewed confidence in Pakistan’s manufacturing base, supported by better energy availability, policy continuity, and moderate inflation. It noted that industrial recovery continues to anchor overall economic growth.
Other industries such as food processing, apparel, and tobacco also recorded gains. Growing domestic and export demand supported higher capacity utilization, particularly in garments and knitwear, which maintained strong export performance.
Economic impact and outlook
Economists said the continued LSM recovery signals the early phase of industrial rebound after several years of slow performance. They added that if this trend continues, it could translate into job creation, increased tax revenue, and stronger economic growth.
The Finance Division highlighted that the industrial upturn was supported by steady credit expansion to the private sector, which helped firms finance working capital and modernization. Improved business confidence and macroeconomic stability also contributed to the higher output levels.
The report projected that industrial growth will continue in the coming quarters, driven by automotive demand, construction projects, and export-oriented manufacturing. It added that large-scale manufacturing will remain a key driver of Pakistan’s GDP growth in FY2026.