Bangladesh’s economy continued to expand in August, but at a slower pace, with the Purchasing Managers’ Index (PMI) falling to 58.3, down from 61.5 in July.
The findings were published Sunday in the latest PMI report released jointly by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB).
The PMI, launched by MCCI and PEB with support from the UK Government and technical input from the Singapore Institute of Purchasing & Materials Management (SIPMM), aims to provide timely insights into the country’s economic performance for businesses, investors, and policymakers.
The drop in August’s PMI reflects slower growth in both manufacturing and services sectors, while agriculture and construction sectors moved back into contraction after showing growth in the previous month.
Agriculture sector returned to contraction after 10 consecutive months of growth. Key indicators such as new business, business activity, and input costs slowed down. Employment also continued to decline, though at a slower rate.
Manufacturing continued to expand for the 12th month but at a reduced pace. Positive signs were seen in new orders, exports, factory output, and input purchases, but order backlogs and employment declined.
After showing its first expansion last month, Construction sector slipped back into contraction. Despite gains in new business and construction activity, both order backlogs and employment weakened.
Service sector registered its 11th straight month of growth, though slower than before. New business, activity, and employment increased, but the order backlog index fell into contraction.
Future business sentiment weakened in agriculture, manufacturing, and construction sectors, while the services sector showed improved expectations.
Respondents cited political instability, seasonal slowdowns, and rising input costs as key challenges affecting business activity. Some sectors saw temporary boosts from past orders and ongoing projects.
“The latest PMI readings indicate that the Bangladesh economy has remained in expansion mode for 11 consecutive months, though momentum is slowing. Agriculture and construction were hit by prolonged monsoon disruptions, while manufacturing and services also grew at a slower pace — reflecting trends such as declining export earnings in August,”
said Dr M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh.
The PMI continues to be a vital tool for understanding real-time economic conditions and supporting informed decision-making across sectors.