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Bangladesh’s economy showed signs of accelerating growth in July, as the country’s overall Purchasing Managers’ Index (PMI) jumped to 61.5, marking an 8.4-point increase from the previous month, according to a press release cited by BSS.

This robust expansion was driven by faster growth in the manufacturing and services sectors, alongside a return to expansion in the construction sector. However, the agriculture sector grew at a slower pace, while employment indicators continued to show weakness across most sectors.

Manufacturing Strengthens

The manufacturing sector marked its 11th consecutive month of expansion, with faster growth recorded in new orders, factory output, input purchases, imports, and order backlogs. However, the sector faced contraction in employment and new export orders, indicating some pressure on workforce hiring and external demand.

Services Sector Maintains Momentum

The services sector also reported its 10th straight month of expansion, and at a faster rate. Positive readings were recorded across all key indicators, including new business, business activity, employment, input costs, and order backlogs—signaling strong domestic demand.

Construction Rebounds

After posting its first-ever contraction in June, the construction sector returned to expansion territory in July. Growth was observed in new business, construction activity, input costs, and order backlogs, though the employment index continued to contract for a third straight month.

Agriculture Slows Amid Seasonal Effects

While the agriculture sector expanded for the 10th month, the pace was slower due to the monsoon season and seasonal lean period. The sector saw a slowdown in new business, activity, and input costs, though order backlogs grew at a faster rate.

Future Outlook Mixed

Looking ahead, the future business index indicated slower expansion in agriculture, manufacturing, and services, while the construction sector showed increased optimism with a faster expansion rate.

Economic Commentary

Dr. M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, stated:

“The latest PMI readings indicate that the overall Bangladesh economy expanded in July, primarily driven by growth in the services and manufacturing sectors—supported by record export earnings of $4.77 billion. The agriculture sector, however, showed signs of deceleration due to seasonal and weather-related factors.”

The PMI data paints an encouraging picture of Bangladesh’s economic activity in July, with resilient domestic demand and improved business confidence in key sectors, though employment and external trade indicators warrant close monitoring.