Dhaka:Bangladesh's Purchasing Managers' Index (PMI) returned to expansion in October, reaching 51.8 points, an increase of 3.2 points from September. This growth reflects expansion in all four key economic sectors agriculture, manufacturing, construction, and services, after two months of contraction.
According to Bangladesh Sangbad Sangstha, the latest PMI reading was released jointly by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB). The report indicated faster growth in agriculture and a return to expansion in the manufacturing, construction, and services sectors.
In the agriculture sector, the index rose by 6.0 points to 61.2 in October, marking its 14th consecutive month of expansion. New business, business activity, and employment indexes in agriculture continued to grow, with order backlogs also returning to expansion and input costs remaining elevated.
The manufacturing sector returned to expansion with a 6.1-point increase to 50.9. Stocks of input purchases, finished goods, and imports expanded, while employment and supplier deliveries continued to grow. However, new orders, export orders, and factory output remained in contraction, with order backlogs sharply contracting. Input prices continued to expand strongly, indicating persistent cost pressures.
In the construction sector, the PMI increased by 2.5 points to 51.0, marking a return to expansion. Employment also expanded after remaining unchanged in September, though new business and construction activity contracted, with input costs showing strong expansion.
The services sector saw a 1.3-point increase to 50.3, returning to expansion after two months. Employment expanded, but new business, business activity, and order backlogs continued to contract. Input costs maintained strong expansion.
The Future Business Index indicated expansion across all sectors, suggesting positive expectations for future business conditions. However, Dr. M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, cautioned that the recovery remains fragile, with new orders and business activity shrinking in manufacturing, construction, and services, while input costs are high. He emphasized the need for reliable energy supplies, easing working-capital constraints, and controlling business costs to sustain recovery. Positive future business expectations provide encouragement, but translating this into investment and production requires more predictable operating conditions.
The Bangladesh PMI, developed by MCCI and Policy Exchange Bangladesh with support from the UK Government and technical assistance from the Singapore Institute of Purchasing and Materials Management, aims to provide timely insights into the country's economic health to assist businesses, investors, and policymakers.