Rising production costs, limited access to modern technology and energy shortages have forced industries to struggle to maintain their competitiveness in international markets. Report
Monday, January 6, 2025
ISLAMABAD (UrduPoint News - 06 January 2025) Rising production costs and global competition are pressuring Pakistan’s industrial sector to adopt austerity strategies to increase productivity and gain a strong position in international markets. According to the report, Pakistan’s industrial sector, which is a major contributor to the country’s economic growth, is facing increasing challenges with the intensity of global competition. Rising production costs, limited access to modern technology and energy shortages have forced industries to struggle to maintain their competitiveness in international markets.
Dr. Sajid Amin, a prominent economist and deputy executive director of the Sustainable Development Policy Institute, says that effective cost management has emerged as a key strategy to restore industrial productivity and position Pakistan’s manufacturing sector as a global contender. It involves identifying, analyzing and controlling costs to improve resource allocation and maximize profits. Adopting low-cost practices is not just a choice for industries in Pakistan, but a necessity.
He said that raw material prices in Pakistan have increased due to supply chain disruptions, import dependence and local market imperfections. Industries that rely on imported materials like textiles and electronics face steep price hikes, which reduces profit margins. Therefore, encouraging local sourcing, promoting industrial linkages and promoting indigenous material development can reduce this burden by increasing self-reliance. Energy costs are a major part of industrial costs.
He said that Pakistan’s industries, which often rely on old machinery and inefficient energy systems, struggle to improve energy efficiency. Investing in renewable energy solutions, upgrading energy-efficient technologies and implementing smart energy management systems can significantly reduce costs. Government incentives for energy-saving practices can further accelerate this transition. Adopting technology can play a transformative role in cost management. In addition, digital tools such as enterprise resource planning systems, artificial intelligence and data analytics enable businesses to monitor costs in real time, predict financial trends and improve resource allocation.
Dr. Sajid said that the industrial sector has immense potential for economic growth, job creation and increased export earnings, however, to achieve this potential, a concerted effort is needed to manage costs effectively. By adopting low-cost methods, leveraging technology and promoting an enabling policy environment, industries can improve competitiveness and strengthen their position in the global market.
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