Pakistan’s Large-Scale Manufacturing Grows 5% in First Half of FY26
Pakistan’s Large-Scale Manufacturing (LSM) sector showed signs of recovery as the LSM Index posted a 0.4 percent year-on-year (YoY) increase in December 2025, alongside a strong 9.3 percent month-on-month (MoM) growth, signaling a rebound in industrial activity.
During the first half of FY26 (1HFY26), the LSM index recorded a 5 percent YoY expansion, reflecting improving momentum across key manufacturing segments. The uptick suggests that industrial output is gradually stabilizing after periods of contraction driven by economic challenges, high input costs, and subdued demand.
The December MoM surge indicates seasonal demand recovery and improved production cycles in several sub-sectors, while the overall 1HFY26 performance highlights strengthening business confidence and operational capacity within large industries.
Large-scale manufacturing plays a critical role in Pakistan’s economy, contributing significantly to GDP, exports, and employment. A sustained recovery in LSM is often viewed as a leading indicator of broader economic stabilization and growth.
Economists note that continued policy support, stable exchange rates, and easing inflationary pressures could further bolster industrial output in the coming quarters. However, energy supply consistency and access to affordable financing remain key factors for maintaining growth momentum.
