Bangladesh’s economic activity lost momentum in March, as the ongoing Middle East conflict and prolonged Eid holidays disrupted production and weakened overall business conditions.
The latest Purchasing Managers’ Index (PMI) shows a slower pace of expansion, with the index falling by 2.2 points to 53.5 in March from 55.7 in February.
In January, the reading stood at 53.9, highlighting a pattern of uneven economic movement in recent months.
The PMI, jointly compiled by the Metropolitan Chamber of Commerce and Industry and Policy Exchange Bangladesh, is based on responses from 400 private-sector firms across agriculture, manufacturing, construction, and services. A reading above 50 signals expansion, while below 50 indicates contraction.
The survey points to mixed business conditions across sectors. Seasonal demand ahead of Ramadan and Eid-ul-Fitr offered some support, particularly in retail and services, but it was not enough to offset broader weaknesses.
Rising costs remain a key concern. Businesses reported higher spending on raw materials, labour, transport, and utilities, squeezing profit margins despite expectations of stronger festive sales.
At the same time, new orders declined in the manufacturing and construction sectors, reflecting a cautious approach by both investors and buyers. Business confidence continues to be affected by domestic political uncertainty and global volatility.
Most firms, however, remain cautiously optimistic. They think that business conditions could gradually improve in the coming months if macroeconomic and political stability returns.
M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said the March PMI indicates a clear slowdown in growth momentum, driven largely by weakness in the manufacturing sector.
He noted that extended holidays and uncertainty in global demand linked to the Middle East conflict have weighed on production. The ongoing tensions, he warned, could further fuel inflation and disrupt supply chains, posing additional risks to the economy if the situation persists.