Pakistan’s most important sector of the economy, i.e. the Large Scale Manufacturing LSM is continuously showing depressed performance as the recently released figures show that the sectoral performance has moved in negative columns by 8.24 percent on year on year (YoY) bases during the ten months of current fiscal year 10MFY09.
Computation of quantum index numbers of large scale manufacturing industries by Federal Bureau of Statistics FBS shows that in April 2009 LSM performance declined and turned negative by 14.07 percent as compared to the same month of last fiscal year.
Three major components of LSM, Oil Companies Advisory Committee OCAC shows greatest fall of 9.2 percent in the production of petroleum sector, Ministry of Industries production declined by 8 percent and bureaus of statistics BOS show decline of 8 percent in 10MFY09.
The month of April 2009 registered worst performance of the LSM sector with petroleum sector declining to negative 9 percent, ministry of Industry negative 13.66 percent and MOS declining to negative 15.37 percent as compared to the April 2008.
In addition to power outages, slackening demand, domestic and external, the sub-par performance of the cotton, production down 1.4 percent and sugar cane down to negative 21.7 percent has further pulled down LSM with both cotton yarn and cloth, having substantial LSM weights of 17.4 percent  and 10 percent, registering stagnant performance in 10MFY09.
Sugar, with the weight of 5.5 percent in LSM, has also recorded a sharp decline of 32.1 percent July to April period of fiscal year. The data shows that the production of sugar in month of April declined by 100 percent as compared to the same period of last year. Wheat harvesting season pushed the production of sacks up as the demand for the product rose sharply and was recorded 27.40 percent higher during the ten months of fiscal year 2009 ending on June 30, 2009 as compared to the same period of previous year. The phosphoric fertilizer sector depicted healthy production growth which rose by 35 percent during 10MFY09 and hefty 49 percent in April over corresponding period of last fiscal year.
Current data shows that the demand for fertilizers remained high and between January and May 2009 the urea and DAP sales increased by 7 percent and 114 percent Y0Y, respectively. Farmer purchasing power has improved due to high wheat support prices, while lower DAP prices has further elevated its demand. Although urea sales in May 09 were down by 2 percent , they were still 19 percent higher than the 5 year average sales for the month of May.
Punjab, which accounts for 68 percent of country's urea off-take was the growth driver in May 09, with sales rising 6 percent.  DAP sales remained robust in May 09 with highest ever sales for the month of May as the gap between DAP and urea prices narrowed. Weighted average retail urea prices for were up by 22 percent  to Rs 751 per bag while DAP dropped by 14 percent to Rs 2,076 per bag. The encouraging data means that the production of the fertilizer sector in the current year will remain on the higher side thus benefiting LSM sector. 
In the petroleum sector, FBS data shows, kerosene oil production declined by 19 percent in 10MFY09 while in April its witnessed sharp decline of 33 percent. High speed diesel oil declined by 6 percent and 16 percent in ten months and April 2009 respectively. Lubricating oil production declined by 6 percent in ten months but its production improved in the April it turned positive 5 percent.  
Pakistan auto sector which enjoys government's full patronage with no competition has again depicted very depressed performance. The assembling of cars has declined by 49 percent in July-April 2009 and 53.4 percent in April this year. Higher prices of cars and restriction on imports of cars has badly hurt sector's performance but the authorities seem to have turned blind eye.  Worst ever performance of LSM sector was partly linked to the higher interest rates regime in the country. However experts believe that by reversing of interest rate industries can be put back on the track which would be supported by overall decline in international commodity prices and stable exchange rate outlook. Analysts say that few structural issues including power crisis remained unresolved which has a detrimental impact on LSM, particularly the textile group which has 32.6 percent weight, would negatively impact the performance of LSM sector. Solution to power problems is required on a war footing basis for revival of the economy.