Pakistan Manufacturing Rebounds 6.6pc as Industry Recovers

Pakistan’s manufacturing sector recorded a strong recovery in fiscal year 2025-26, expanding by 6.6 percent after a far weaker performance in the previous year. The development was highlighted in Islamabad through figures linked to the Pakistan Economic Survey, showing that industrial activity regained momentum across several key production segments.

The improvement was led mainly by a rebound in large-scale manufacturing, which returned to growth after facing contraction and pressure in recent years. Small-scale manufacturing also posted a notable increase, while the slaughtering segment added further strength to the overall manufacturing performance.

Manufacturing and mining remain central to Pakistan’s industrial base because they support employment, exports, supply chains and tax revenue. Within manufacturing, large-scale industry continues to dominate the sector, making its recovery especially important for the broader economy at a time when policymakers are trying to move from stabilisation toward growth.

Officials and survey findings pointed to broad-based progress in industrial output, with large-scale manufacturing expanding during July-March of the outgoing fiscal year. March alone showed a sharp year-on-year rise, indicating that factories in several categories had begun operating with greater confidence after earlier disruptions caused by import controls, higher costs and weak demand.

The automobile sector emerged as one of the stronger contributors to the recovery. Passenger car production and sales rose sharply during the July-March period, while electric vehicle activity also showed gradual market penetration as consumers looked for alternatives in response to high fuel prices and changing transport trends.

Heavy commercial vehicles also performed strongly, with truck and bus production improving from the previous year’s levels. However, the volume of locally assembled commercial vehicles remains limited compared with Pakistan’s market size, showing that industrial revival still requires deeper investment, stable policy and stronger demand from logistics and infrastructure sectors.

The textile and apparel industry, Pakistan’s most important export-oriented manufacturing segment, continued to play a major role in industrial value addition and employment. Even though export performance remained under pressure, the sector’s link with agriculture, labour markets and foreign exchange earnings makes it a critical area for sustained economic recovery.

The latest manufacturing numbers are significant for Pakistan because a healthier industrial base can support jobs, improve exports and strengthen fiscal revenues. The next challenge for the government will be to turn this rebound into durable growth by ensuring energy affordability, smoother imports of raw material, policy consistency and stronger confidence among investors and manufacturers.