Bangladesh’s Purchasing Managers’ Index (PMI) edged down to 53.9 in January ahead of the national election, slipping from 54.2 in December and signalling a slower pace of expansion despite growth across all key sectors.
The PMI was released by Metropolitan Chamber of Commerce and Industry Dhaka and Policy Exchange Bangladesh, with support from the UK government and technical assistance from Singapore Institute of Purchasing & Materials Management.
It is a monthly indicator based on surveys of purchasing managers that tracks trends in output, new orders, employment, costs and expectations. A reading above 50 signals expansion, while a reading below 50 indicates contraction.
The 0.3-point month-on-month decline reflects sharper slowdowns in agriculture and manufacturing, which outweighed stronger momentum in construction and services.
Agriculture recorded its fifth consecutive month of expansion, though the index dropped to 53.0 in January from 59.6 in December. The survey found that growth in new business and activity was offset by contraction in employment and input costs. Order backlogs continued to contract, though at a slower pace.
Manufacturing stayed in expansion for a 17th consecutive month, with the index falling to 52.1 from 58.2 as growth eased. The survey found expansion in new orders, factory output, imports, input prices and supplier deliveries. It also found contraction in new exports, input purchases, finished goods and employment. Order backlogs returned to expansion during the month.
Construction rebounded to expansion after a December contraction. The sector index rose to 58.2 in January from 49.8, driven by stronger new business, construction activity and input costs, even as employment and order backlogs remained in contraction.
Services extended expansion for a 16th consecutive month, with the index rising to 54.1 from 51.8. The survey found growth in new business, activity, employment, input costs and order backlogs.
Overall business sentiment remains weak and uncertain. The survey found that higher input costs for raw materials, wages, transport and production, combined with sluggish sales, increased operational pressure. Political uncertainty linked to the upcoming election led to delayed orders, reduced investment and cautious buyer behaviour.
Seasonal factors and imports further dampened demand in some sectors. The survey found that many businesses expect conditions to improve after March or after the election, although liquidity constraints and cost pressures continue to challenge operations.
The latest PMI readings show the economy experienced slower expansion, with weak global supply chain recovery and cautious order placement weighing on manufacturing exports, said Policy Exchange Bangladesh Chairman and CEO M Masrur Reaz.
The agriculture sector also showed signs of slowdown following the late autumn paddy harvests, he said.
The continued expansion of the future business index across agriculture, manufacturing, construction and services points to sustained optimism ahead, he added.
