Pakistan's manufacturing output falls 0.98% in May despite strong FY26 growth

Pakistan’s large-scale manufacturing output fell 0.98% in May from a year earlier, signaling a pause in the sector’s recovery, although production increased from April and cumulative growth during the first 11 months of fiscal year 2025-26 remained strong, official data showed Tuesday.

Provisional data released by the Pakistan Bureau of Statistics showed the Quantum Index of Manufacturing (QIM), based on 2015-16 prices, stood at 116.10 in May, down from 117.25 a year earlier but up from 114.71 in April.

During July-May FY26, large-scale manufacturing expanded 5.77%, with the average QIM rising to 121.65 from 115.02 in the corresponding period of the previous fiscal year.

The automobile industry remained the strongest-performing sector, with output increasing 20.81% in May from a year earlier and 58.82% during the first 11 months of FY26. Sugar production also posted strong growth, rising 23.25% in May and 31.54% during July-May.

Petroleum products recorded 15.75% annual growth in May, lifting cumulative expansion to 10.56%, while garment production increased 7.05% during the month and 7.31% over the first 11 months of the fiscal year.

However, several key industries remained under pressure. Iron and steel output fell 12.57% in May and was down 7.49% during July-May. Cement production declined 9.36% in May, although it remained 7.16% higher on a cumulative basis. Fertilizer output contracted 4.77% during the month and 2.25% over the first 11 months of FY26.

Among major industries, automobiles made the largest contribution to overall manufacturing growth, adding 1.53 percentage points, followed by food at 1.36 points, garments at 1.20 points, petroleum products at 0.78 points, cement at 0.40 points, electrical equipment at 0.35 points, furniture at 0.33 points, other transport equipment at 0.26 points, beverages at 0.24 points and tobacco at 0.20 points.

Meanwhile, pharmaceuticals, iron and steel products, chemicals, textiles and leather products weighed on overall manufacturing performance, reflecting continued weakness across several industrial segments.

The latest data suggest manufacturing activity lost momentum in May compared with a year earlier, but the sector remained on track for solid growth in FY26, supported by continued expansion in automobiles, food processing, petroleum products and garments.