Pakistan’s Large Scale Manufacturing (LSM) growth experienced a significant surge, increasing by 6 percent year-over-year (YoY) during the first five months of Fiscal Year 2026 (5MFY26). This robust increase highlights a positive trend in the nation’s industrial output. Furthermore, the LSM Index recorded a 10.4 percent YoY rise and a 0.2 percent month-over-month (MoM) increase in November 2025. Consequently, this data signals consistent momentum within the manufacturing sector.
Driving Factors: Key Sectors Boosting Pakistan LSM Growth
Several vital industries contributed substantially to this impressive performance. Notably, the Automobiles sector led the charge with an outstanding 61 percent YoY expansion, demonstrating strong consumer demand. Following closely, Petroleum products demonstrated a robust 44 percent YoY increase, indicating heightened activity in the energy sector.
Moreover, other sectors also played crucial roles:
- Beverages: Experienced a healthy 33 percent YoY uplift, driven by consistent consumer spending.
- Wearing Apparels: Grew by 18 percent YoY, indicating a notable recovery in textile and garment manufacturing.
- Pharmaceutical Products: Showed a slight but steady 0.3 percent increase, contributing positively to overall LSM figures.
Challenges: Sectors Facing Decline
Despite the overall positive industrial momentum, not all sectors shared in the growth. Conversely, some industries faced significant declines during the same period. Machinery & Equipment, for instance, saw a notable 16 percent YoY decrease. This downturn points to potential investment or operational slowdowns within this critical segment. Similarly, Leather products experienced a 2.3 percent YoY downturn in November 2025, highlighting specific challenges in that industry.
Economic Outlook: Expert Forecast for FY26
Market analysts are closely monitoring these developments, providing valuable insights. Topline Securities, a prominent brokerage house, revised its Large Scale Manufacturing target for FY26 upwards. In their report released on December 31, 2025, the firm increased its LSM growth forecast from an earlier 2.5 percent to a more optimistic 4.0 percent. This adjustment reflects growing confidence in Pakistan’s manufacturing sector trajectory for the current fiscal year.
