The State Bank’s Purchasing Managers Index (PMI) surged to a 30-month high in April 2025, signaling a noticeable uptick in manufacturing sentiment. Capacity utilization in the sector improved modestly, up by 1 percentage point year-on-year. Meanwhile, Large-Scale Manufacturing (LSM) posted a 1.78 percent year-on-year increase in March 2025 — the first positive reading since October 2024. Of the 22 major sectors tracked by the Pakistan Bureau of Statistics (PBS), 10 registered cumulative growth during 9MFY25, pushing the diffusion index into positive territory for the first time in six months. But that is about where the optimism fades. A closer look at the broader LSM picture reveals a grim reality — one that is hard to ignore. Take March 2017, for instance: its LSM index was a full six percentage points higher than that of March 2025. And this is not an outlier. The index readings for March in 2018, 2019, 2021, and 2022 all surpass the latest figures by a significant margin. While recent months have already marked five- and six-year lows, the March 2025 reading pushes the benchmark back even further — effectively wiping out eight years of progress. Cumulative LSM growth has remained in negative territory for eight consecutive months, with the 9MFY25 index now at its lowest level since FY21. While the diffusion index has shown some improvement, the gains remain shallow: only three of the 12 growing sectors posted double-digit growth. In contrast, seven out of the 10 sectors in decline suffered double-digit contractions. Admittedly, low-weight categories like furniture and electrical equipment dragged the overall index down, offsetting gains from more resilient segments such as readymade garments and automobiles. Yet even among heavyweight industries — cement, steel, and chemicals — the performance remains lackluster, offering little cause for optimism. Half of the 22 LSM sub-sectors continue to operate below the index levels recorded at the start of the current base year — nearly a decade ago. This is not a cyclical dip; it is structural regression. Some industries may never claw their way back. The scale of the decline is sobering on a seasonally adjusted 12-month rolling basis, cement output is at an 8-year low, steel at a 5-year low, chemicals at a 4-year low — and a host of smaller industries are hovering near decade-long troughs. The erosion runs deep. There are, admittedly, some bright spots. The automobile and allied industries continue to recover, helped along by a favorable base effect. Pharmaceuticals and textiles have also shown signs of life. But even these relative gains come with caveats. Most of these sectors remain well below the peaks they reached at various points over the past 7–8 years. The textile sector, for instance, has now clocked 30 consecutive months with its LSM index value stuck below the 100 mark — a telling sign of prolonged stagnation. On the glass-half-full side, industrial activity will not remain subdued indefinitely. A few sectors have begun to show early signs of recovery, and the recent — and anticipated — relief in industrial electricity tariffs, combined with a sharp drop in interest rates, could provide some momentum. That said, returning to the highs of 2022 will not be easy. The erosion in purchasing power over the past two years is too steep to be reversed by a single year of low inflation alone. A sustained recovery will take time — and more than just monetary easing. Copyright Business Recorder, 2025