Written by The Banking Post
Bangladesh’s overall Purchasing Managers’ Index (PMI) edged up by 0.2 points in December, signalling a slightly faster pace of economic expansion, supported mainly by continued growth in agriculture, manufacturing and services.
The PMI rose to 54 points in December from November, remaining comfortably above the 50-point threshold that separates expansion from contraction, according to the latest PMI report released jointly by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh.
The modest improvement reflects sustained expansion in most major sectors, although construction slipped back into contraction after three months of growth.
Agriculture recorded its fourth consecutive month of expansion, with growth accelerating in December. New business, overall activity, employment and input costs all strengthened, while order backlogs contracted at a faster pace, indicating ongoing pressure on fulfilment capacity.
Manufacturing remained in expansion for the 16th straight month, though growth eased slightly compared to November. Most key indicators stayed positive, including new orders, export orders, production, input purchases, imports, prices, employment and supplier deliveries. The finished goods index returned to expansion, while order backlogs continued to decline, albeit more slowly.
In contrast, the construction sector reverted to marginal contraction. New business weakened further, while activity and employment expanded at a slower pace. Input costs rose slightly faster, and order backlogs declined for the fifth consecutive month, though the rate of contraction moderated.
The services sector posted its 15th straight month of expansion, with growth picking up modestly. Employment and input costs remained in expansionary territory, but new business, business activity and order backlogs stayed in contraction, pointing to uneven demand conditions.
Looking ahead, the future business index showed slower expansion across agriculture, manufacturing, construction and services, suggesting cautious optimism. Many survey respondents expect conditions to improve gradually from early next year.
Commenting on the findings, Dr M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, said the latest PMI readings indicate marginal economic expansion, driven largely by strong performance in agriculture. “The manufacturing sector has seen a second consecutive month of slowdown, while construction has returned to contraction. However, the future business index remains in expansion across all key sectors, pointing to sustained optimism and continued growth momentum in the post-election period,” he said.
