KEY POINTS
- Large-Scale Manufacturing surges 8.99% YoY in July 2025
- Momentum signals revival at the start of FY26
- Automobiles, furniture, apparel lead sector gains
- Broad-based industrial recovery boosts investor confidence
ISLAMABAD: Pakistan’s industrial sector started the new fiscal year on a strong footing, with official data showing that Large-Scale Manufacturing (LSM) grew by 8.99 per cent year-on-year in July 2025 — the fastest pace in more than three years.
According to the Pakistan Bureau of Statistics (PBS), July’s surge also represented a 2.6 per cent increase compared to the previous month, underscoring fresh momentum in an economy that has struggled in recent years with inflationary pressures, energy shortages, and high borrowing costs.
Sectors driving the upswing
The July numbers highlight a broad revival across industries. Furniture output soared by 87 per cent, while automobile production jumped 58 per cent and other transport equipment grew 46 per cent.
Apparel manufacturing expanded by 25 per cent, followed by gains in cement (17 per cent), paper (15 per cent), petroleum products (13 per cent), and food (7 per cent). Textiles, pharmaceuticals, and IT equipment also posted positive growth, according to the PBS data.
The recovery reflects “a combination of easing input costs, stable exchange rates, and improving domestic demand,” with the government’s recent focus on lowering borrowing costs and rationalising energy tariffs as key enablers.
Confidence returning
The 37-month high signals renewed confidence in Pakistan’s manufacturing base, which accounts for about one-fifth of the economy, according to the PBS data.
“The rebound in diverse industries shows that the recovery is not confined to a single sector, which is important for sustainability,” a senior official at the Finance Ministry told WE News English.
The improvement comes after years of sluggish growth that followed the global pandemic, currency depreciation, and tight monetary policy.
International investors are also expected to take note of the upturn, especially as Pakistan’s Eurobond yields have eased and rating agencies have recently revised their outlooks upward.
Outlook
With cost pressures declining and exports gradually strengthening, policymakers believe the trend will carry forward into FY26. “If this trajectory continues, it will consolidate Pakistan’s path toward economic stability and growth,” he maintained.
