Bangladesh’s economy recorded a slightly faster pace of expansion in December as the Purchasing Managers’ Index (PMI) rose to 54.2, up 0.2 points from November, driven mainly by continued growth in agriculture, manufacturing and services, according to the latest PMI report released on Wednesday.
The Bangladesh PMI, jointly published by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB), showed that all major sectors expanded during the month except construction, which slipped back into marginal contraction.
The agriculture sector recorded its fourth consecutive month of expansion and at a faster pace, supported by stronger growth in new business, overall activity, employment and input costs.
However, order backlogs in the sector continued to contract, though demand conditions remained relatively resilient.
Manufacturing stayed in expansion for the 16th straight month, despite a slight slowdown compared to November. The sector saw growth across key indicators such as new orders, export orders, factory output, input purchases, imports, employment and supplier deliveries.
The finished goods index returned to expansion, while the contraction in order backlogs eased.
In contrast, the construction sector reverted to marginal contraction after three consecutive months of growth. The decline was driven mainly by a faster contraction in new business.
Although construction activity and employment continued to expand, they did so at a slower pace. Order backlogs contracted for the fifth month in a row, albeit at a reduced rate.
The services sector posted its 15th consecutive month of expansion and showed a slightly faster pace of growth. Employment and input costs remained in expansion, but new business, business activity and order backlogs registered contraction, reflecting softer demand conditions.
Despite the overall expansion, business sentiment remained subdued. Survey respondents cited political uncertainty, seasonal demand slowdown, rising production costs, price instability and weak sales as key challenges, although many expressed optimism about gradual improvement from early next year.
Looking ahead, the future business index showed slower expansion across agriculture, manufacturing, construction and services, suggesting cautious optimism.
Commenting on the findings, Dr M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said the latest PMI readings indicate “a marginal expansion of the economy, driven by strong agricultural sector performance.”
“Manufacturing experienced a second straight month of slowdown, while the construction sector reverted to contraction. The future business index, however, remained in expansion across all key sectors, suggesting sustained optimism and continued growth momentum post-elections,” he added.
The PMI is designed to provide timely insights into the country’s economic conditions to help businesses, investors and policymakers make informed decisions.
The initiative was developed by MCCI and Policy Exchange with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM).