Pakistan’s large-scale manufacturing sector is showing clear signs of recovery this year. Fresh data from the Pakistan Bureau of Statistics reveals that the LSM index grew by 5.8% year-on-year during the first seven months of FY26 (July 2025 to January 2026). This marks a solid turnaround after weaker performance in previous years.
January 2026 alone stood out strongly, with output jumping 10.5% higher than the same month last year and rising 12.1% from December. The main push came from key industries bouncing back. Automobile production surged 67%, sugar output climbed 24%, while garments and cement both posted 11% gains.
However, some areas still struggled; furniture fell 19.4%, machinery dropped nearly 9%, and leather goods slipped 2.9%.
Economists say lower interest rates, better local demand, and easier raw material access helped the overall growth. The government sees this as proof that industrial policies are starting to work and could create more jobs if the momentum continues.
Stats:
| Period | Growth (YoY) | Month-on-Month | Key Highlights |
|---|---|---|---|
| July–Jan FY26 (7 months) | 5.8% | – | Overall recovery |
| January 2026 | 10.5% | +12.1% | Strongest month |
| Automobiles (Jan) | +67% | – | Biggest gainer |
| Sugar (Jan) | +24% | – | Major boost |
| Garments & Cement (Jan) | +11% each | – | Steady support |
| Furniture (Jan) | -19.4% | – | Biggest loser |