2 Size Distribution of Pak SMEs Notwithstanding the infrequent surveys of SME sector in Pakistan, the number of such units, especially small, is probably much larger than is officially reported. The surveys normally cover those firms that are registered and a large number of very small firms go unrecorded because they seek to remain hidden or the enumerators are not fully motivated to include them in the data. Most of small firms in Pakistan are very small, with limited employment potential and little chance of growth; their primary concern is survival. In general, the firms with relatively more workers are smaller in number and those with smaller number of workers are in majority. Moreover, most of the firms are owner-managed, supported by family workers. The hired workers are few and found mostly in growing firms. According to the latest Economic Census of Pakistan (2005), there were 2.96 million units in the country, of which 2.8 million (93.9%) were Establishments and 0.18 million (6.1%) were Household Units (including all activities of producing goods and services for sale or barter in the market). Further, Punjab had the largest share of 65.26% in the total establishments in 2005, followed by Sindh (17.82%), NWFP (14.21%), and Balochistan (2.09%) [GoP 2005]. Of the total 2.96 million Establishment and Household units, about 53% were in the major industry group of Wholesale and Retail Trade and Hotels / Restaurants, followed by Community, Social and Personal Services (22.3%). Manufacturing is the third largest group with 19.72% share of the total Establishments. [Table] Table. Number of Establishments by Major Industry Divisions: 2005 Source: Economic Census of Pakistan, 2005, FBS, Statistics Division, Islamabad Among the Household units, the highest share is that of manufacturing sector (66.5%), followed by Community, Social and Personal Services (20.5%), Agriculture, Poultry Farming, Fishing etc. (8.7%), and Wholesale and Retail Trade, etc. (about 4.00%). Manufacturing firms’ data show that, of the total 5, 83,329 units in the census, 117176 were Households units (20.0%) and 466153 (80.0%) in the category of Establishments. The majority of the total manufacturing establishments (43.2%) were in Textile Wearing, Apparel and Leather industries, followed by Food, Beverages and Tobacco (20.9%), Wood and Wood Products (10.8%), Fabricated Metal Products, Machinery and Equipment (10.0%), Other Manufacturing Industries and Handicrafts (8.9%) and the remaining sectors had 11.1 % share. It is also interesting to note that in the largest industrial group of Textile Wearing, Apparel and leather, 31.5% were Households and 68.5% Establishments. The other important group of activities within the Household sector was Non-metallic Mineral Products (28.0%). Another distinct feature identified by the Census is that about 85.0% of the Household Manufacturing Establishments were located in the rural areas. [Table] Table. Number of Manufacturing Establishments by Status And Area: 2005 (Pakistan) Source: Economic Census of Pakistan, 2005, FBS, Statistics Division, Islamabad Further, the Textile, Apparel and Leather segment had the largest share (54.0%) among the rural area Household units. Other Manufacturing Industries and Handicrafts in the rural area Households had a share of 18.0%. In the urban areas, the largest share of the Household Establishments was that of Textile, Apparel and Leather Industries (78.7%), followed by Other Manufacturing and Handicrafts (9.3%), Wood Products including Furniture Manufacturing (3.3% and the remaining industries (8.6%). Overall, in the urban areas the share of Manufacturing Establishments (other than Households) was the largest (93.8%). Within this category, the share of Textile, Apparel and Leather was 43.0%, Fabricated Metal Products 15.8%,
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Investment and Finance