Pakistan Factory Output Stalls as Steel, Fertiliser Slump in August
Pakistan LSM growth August data show factory output barely moved, with large-scale manufacturing rising just 0.67 per cent year-on-year in August 2026. Output fell 4.96 per cent compared with July, according to provisional figures released by the Pakistan Bureau of Statistics.
The Quantum Index of Manufacturing for August was estimated at 113.19, against 112.45 in August 2025 and 119.10 in July 2026. Cumulatively, factory activity posted 1.85 per cent growth during July-August of the current fiscal year, with the index reaching 116.14 against 114.03 in the same period last year.
What dragged Pakistan LSM growth in August
Production rose in several sectors during July-August, including tobacco, wearing apparel, wood products, coke and petroleum products, rubber products, non-metallic mineral products, fabricated metal, computer and electronics products, electrical equipment, automobiles, other transport equipment and furniture. Output fell in food, beverages, textiles and leather products.
He said a transport strike hit wearing apparel output, while higher taxes and uncertainty around the auto policy dampened automobile sales on a sequential basis.
Sector-wise: steel and fertiliser fall, autos and refineries rise
The sectoral detail shows a split picture. Wearing apparel production increased 10.85 per cent in August compared with a year earlier and grew 16.69 per cent during July-August. Coke and petroleum products surged 31.85 per cent in August, with 15.48 per cent growth over the two-month period.
Automobile production increased 11.66 per cent in August and posted 32.45 per cent growth during July-August. Cotton yarn output rose 1.46 per cent in August, while cotton cloth edged up 0.04 per cent. The weakness in textiles matters for jobs and exports: the sector has already been warning about pressure from imports and rising costs.
In contrast, fertiliser production declined 9.00 per cent in August and fell 7.55 per cent during July-August. Iron and steel production dropped 11.56 per cent in August and 11.48 per cent over the two months. Cement production decreased 3.52 per cent in August, though it still recorded 1.26 per cent growth for July-August.
The steel slump is worth watching. Construction and infrastructure activity depend heavily on domestic steel, and a sustained fall could signal weaker building demand ahead of the winter season.
IT exports hit near-record $435 million
The bright spot in the data came from technology. IT exports reached $435 million in September, up 18 per cent year-on-year and 10 per cent month-on-month. It was the second-highest monthly figure on record, just short of the all-time peak.
First-quarter IT exports for the fiscal year totalled $1.25 billion, up about 18 per cent year-on-year. Adviser to the Finance Minister Khurram Schehzad noted on X that targeted incentives in the FY27 budget for the export sector, particularly IT, were supporting exports, non-debt foreign exchange earnings and high-value jobs.
Topline Securities said the September figure was a nine-month high, up 19 per cent year-on-year. The trailing 12-month value reached $4.8 billion, reflecting 20 per cent growth from $4.0 billion a year earlier.
Why this matters
Large-scale manufacturing is the backbone of Pakistan’s industrial economy and a major source of formal employment. Two months into the fiscal year, the sector is growing but only modestly, and the August slowdown shows how quickly momentum can fade when input costs rise and policy uncertainty creeps in.
For ordinary readers, the data feed into prices and jobs. Strong refinery and auto output support employment in industrial hubs, while the fertiliser decline could affect farm input costs in the coming sowing season. The IT export boom, meanwhile, continues to be the economy’s most reliable growth engine.
*Source: The Express Tribune, based on Pakistan Bureau of Statistics data.*
Frequently asked questions
What is large-scale manufacturing?
Large-scale manufacturing covers Pakistan’s major factories and industrial units, from textiles and food processing to steel, cement and automobiles. The PBS tracks it through the Quantum Index of Manufacturing.
How much did LSM grow in August 2026?
LSM output rose 0.67 per cent year-on-year in August 2026 but fell 4.96 per cent compared with July. Cumulative growth for July-August stood at 1.85 per cent.
Which sectors declined?
Fertiliser production fell 9.00 per cent in August, iron and steel dropped 11.56 per cent, and cement declined 3.52 per cent. Food, beverages, textiles and leather also recorded lower output.
How did IT exports perform?
IT exports reached $435 million in September 2026, up 18 per cent year-on-year and the second-highest monthly figure on record. First-quarter exports totalled $1.25 billion.
