Bangladesh’s economic activity accelerated in July, with the Purchasing Managers’ Index (PMI) climbing to 61.5 — an 8.4-point increase from the previous month — signaling robust growth across key sectors, according to the latest report from the Metropolitan Chamber of Commerce and Industry (MCCI).
The strong uptick was largely driven by improved performance in the manufacturing and services sectors, while the construction sector rebounded after a contraction in June. Agriculture, however, saw a slower pace of growth amid monsoon-related disruptions and seasonal slowdown.
The PMI, a globally recognized forward-looking indicator, reflects economic expansion when it reads above 50 and contraction when below. July’s reading suggests broad-based recovery across major sectors.
Manufacturing and Services Lead Growth
Manufacturing recorded its 11th consecutive month of expansion, boosted by increases in new orders, factory output, input purchases, and imports. However, both new export orders and employment within the sector saw declines, pointing to lingering challenges in external demand and job creation.
The services sector posted its 10th straight month of growth, with notable gains in new business, overall activity, employment, input costs, and order backlogs.
Construction Rebounds, Agriculture Slows
After contracting in June, the construction sector returned to expansion in July, supported by increased business activity and rising input costs. Nonetheless, employment in the sector declined for the third month in a row.
Agriculture continued its growth streak for a 10th month, though at a slower pace due to reduced activity during the lean season and disruptions caused by the monsoon. New business in the sector also saw a decline.
Despite increased order backlogs across sectors, overall employment slipped for the second consecutive month.
Mixed Outlook Ahead
The Future Business Index indicated a slower pace of expected growth in agriculture, manufacturing, and services sectors, while construction is projected to grow at a faster rate.
“The latest PMI readings show that Bangladesh’s economy expanded in July, led by robust growth in manufacturing and services. Export earnings also hit a record $4.77 billion during the month,” said M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh (PEB).
The PMI, launched jointly by the MCCI and PEB in January 2024 with support from the UK government, surveys over 500 private sector firms across agriculture, manufacturing, construction, and services to provide a comprehensive snapshot of the country’s economic health.