Bangladesh’s overall economic activity gained momentum in February as the Purchasing Managers’ Index (PMI) rose to 55.7, up 1.8 points from the previous month, driven mainly by stronger growth in the agriculture and services sectors.
The latest reading indicates faster expansion across agriculture, manufacturing and services, although the construction sector slipped back into contraction during the month, according to the February PMI report released on Sunday.
The report was jointly published by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and Policy Exchange Bangladesh (PEB).
According to the report, the agriculture sector recorded its sixth consecutive month of expansion, with growth accelerating. The indexes for new business and business activity expanded at a faster pace, while input costs and order backlogs returned to expansion. However, the employment index continued to contract, and at a faster rate.
The manufacturing sector remained in expansion for the 18th straight month, with growth gaining momentum. Key indicators including new orders, factory output, imports, input prices and supplier deliveries continued to expand.
However, new export orders, finished goods and employment remained in contraction, while input purchases returned to expansion. The order backlogs index, meanwhile, reverted to contraction.
The construction sector, which had expanded in the previous month, returned to contraction in February. The sector saw declines in new business, employment and order backlogs, although construction activity and input costs registered expansion.
Meanwhile, the services sector posted its 17th consecutive month of expansion, with growth accelerating. The sector recorded expansion in new business, business activity, employment, input costs and order backlogs.
Looking ahead, the future business index signalled continued expansion across all major sectors — agriculture, manufacturing, construction and services — reflecting sustained improvements in business expectations.
Survey respondents described a business environment marked by modest seasonal optimism ahead of Ramadan and Eid-ul-Fitr, alongside continued pressure from high input costs and uneven sectoral performance.
While stronger festive demand is expected to support sales, particularly in services and retail, businesses remain concerned about shrinking profit margins due to rising costs of raw materials, labour and utilities, the report said.
Business expectations remain cautiously positive, although the construction sector and parts of the labour market continue to show signs of weakness.
M Masrur Reaz, chairman and CEO of PEB, said the February PMI reflects a modest, seasonally driven uptick in economic activity.
“It suggests a slight increase in economic activity, reflecting stronger demand in agriculture and services linked to Ramadan-related consumption,” he said.
He added that although the continued expansion in the future business index signals sustained business optimism, escalating military conflict in the Middle East could pose significant downside risks to growth expectations.