Bangladesh’s Purchasing Managers’ Index (PMI), a monthly indicator of business activity, rose to 55.7 in February from 53.9 in January, signalling a faster pace of economic expansion.
The PMI, jointly released on Sunday by Metropolitan Chamber of Commerce and Industry (MCCI) Dhaka and Policy Exchange Bangladesh (PEB), tracks changes in business conditions across agriculture, manufacturing, construction and services.
A PMI reading above 50 indicates expansion in economic activity, while a reading below 50 signals contraction.
The February reading reflected stronger growth in agriculture, manufacturing and services, while the construction sector slipped back into contraction.
The PMI initiative was developed by MCCI and PEB with support from the United Kingdom government and technical assistance from Singapore Institute of Purchasing and Materials Management (SIPMM) to provide timely insights for businesses, investors and policymakers.
Agriculture, manufacturing, services drive expansion
The agriculture sector recorded its sixth consecutive month of expansion, with the sector index rising to 64.5 in February from 53.0 in January.
New business and business activity expanded at a faster pace, while input costs and order backlogs returned to expansion. However, the employment index continued to contract and at a faster rate.
The manufacturing sector remained in expansion for the 18th consecutive month, with the sector index edging up to 53.0 from 52.1 in January.
New orders, factory output, imports, input prices and supplier deliveries recorded continued expansion. However, new exports, finished goods and employment remained in contraction, while order backlogs also reverted to contraction during the month.
The services sector recorded its 17th consecutive month of expansion, with the sector index rising to 56.3 in February from 54.1 in January.
Expansion was recorded across new business, business activity, employment, input costs and order backlogs.
In contrast, the construction sector returned to contraction after expansion in the previous month, with the sector index falling to 49.2 in February from 58.2 in January.
The sector recorded contraction in new business, employment and order backlogs, although construction activity and input costs expanded.
Seasonal demand supports outlook
The future business index signalled continued expansion across agriculture, manufacturing, construction and services.
Respondents reported modest seasonal optimism ahead of Ramadan and Eid-ul-Fitr, expecting stronger demand particularly in services and retail sectors.
However, firms said elevated costs of raw materials, labour and utilities are compressing profit margins, while uneven sectoral performance and persistent inflation continue to constrain broader growth prospects.
Policy Exchange Bangladesh Chairman and Chief Executive Officer M Masrur Reaz said the February PMI reflects a modest seasonal improvement in economic activity.
“February PMI indicate a modest, seasonally driven uptick in economic dynamism. It suggests a slight increase in economic activity, reflecting stronger demand in agriculture and services linked to Ramadan-related consumption,” he said.
He added that expansion in the future business index indicates sustained business optimism, although escalating military conflict in the Middle East poses significant downside risks to growth expectations.
