Pakistan’s Manufacturing Sector Shows Strong Recovery in FY2025–26
Pakistan’s manufacturing sector recorded a notable rebound in FY2025–26, becoming one of the key drivers of overall economic growth, according to the Economic Survey FY26.
The sector grew by 6.6%, compared to 2% in the previous fiscal year. Large-Scale Manufacturing (LSM), which contributes the most to industrial output, expanded by 6.1%, while Small-Scale Manufacturing posted an increase of 8.5%.
Officials attributed the improvement to several factors, including lower inflation, greater exchange rate stability, easing monetary conditions, improved availability of raw materials, and better overall business confidence.
Growth was observed across multiple industries, with 16 out of 22 major sectors showing positive performance. Key contributors included food processing, textiles, apparel, automobiles, petroleum products, beverages, and electrical equipment.
The Quantum Index of Manufacturing rose by 6.5% during July–March FY2026. On a year-on-year basis, industrial output increased by 11.1% in March, compared to a contraction in the same month last year.
Overall, the industrial sector grew by 3.51%, playing an important role in supporting Pakistan’s GDP growth of 3.7% during the fiscal year.
The Economic Survey noted that this recovery follows a challenging period marked by high interest rates, import restrictions, and currency instability, which had previously slowed industrial activity.
Officials emphasized that continued policy stability, improved energy supply, and sustained investment will be important for maintaining industrial growth in the coming years.
