Written by The Banking Post
Bangladesh’s business activity lost pace in March, with the latest Purchasing Managers’ Index (PMI) signalling a slowdown across key sectors despite continued overall expansion.
The PMI dropped by 2.2 points to 53.5, indicating that while the economy is still growing, the momentum has weakened. A reading above 50 reflects expansion, but the latest decline points to emerging pressures.
The slowdown was driven largely by softer growth in agriculture and renewed contraction in both manufacturing and construction. In contrast, the services sector maintained steady expansion, helping keep the overall index in positive territory.
Agriculture extended its growth streak to seven months, though at a slower pace. While business activity and input costs rose moderately and order backlogs improved, declines in new business and employment signalled underlying fragility.
Manufacturing slipped into contraction for the first time in 18 months. The downturn was marked by falling new orders, exports, production, imports, and employment. However, some indicators—including factory output, input purchases, and supplier delivery times—continued to expand, suggesting mixed conditions within the sector.
The construction sector remained under strain for a second straight month, with declines in both new business and activity. Rising input costs added to the pressure, even as employment and order backlogs showed signs of recovery.
Meanwhile, the services sector stood out, recording its eighteenth consecutive month of expansion with slightly faster growth. Gains were broad-based, covering new business, activity levels, employment, and order backlogs.
The PMI, a forward-looking indicator based on monthly surveys of more than 500 private sector firms, reflects both global and domestic pressures weighing on the economy.
“The latest readings reflect a moderation in economic activity, driven in part by a manufacturing slowdown linked to extended holidays and weaker global demand,” said Dr M Masrur Reaz.
Analysts say the data points to cautious optimism, as the economy continues to grow but faces increasing headwinds that could test the durability of that expansion in the months ahead.
