Business activity in Bangladesh accelerated in October with the Purchasing Managers’ Index (PMI) reaching 61.8, a 2.7-point rise from September, indicating stronger momentum across all major economic sectors.
The survey, jointly released on Sunday by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh, showed that agriculture, manufacturing, construction, and services all expanded at faster rates as the economy entered the final quarter of the year.
PMI is a forward-looking barometer of business conditions, measuring output, new work orders, employment, delivery timelines, and input costs.
The index is compiled from monthly surveys of more than 500 private-sector companies in Bangladesh using a methodology designed by the Singapore Institute of Purchasing and Materials Management, with support from the UK government.
A reading above 50 signals expansion, 50 shows no change, and below 50 indicates contraction.
“The latest momentum was largely driven by favourable crop conditions and expectations of a strong harvest, while export performance and inflation pressure showed signs of easing,” the index providers said.
The agriculture PMI rebounded sharply to 59.6 from 50.3 in September, marking two consecutive months of growth with higher farm activity, new business, and input demand. The sector also reversed its employment slump, though pending order volumes continued to strain supply response.
Manufacturing PMI extended its expansion streak to 14 months, rising to 66.1 from 65, powered by stronger domestic and export orders, higher factory production, increased purchasing of raw materials, and quicker supplier turnaround. Order backlogs, however, continued to build pressure on capacity.
The construction sector PMI registered 56.5, up from 55.1, marking its second month of expansion, helped by project activity, job creation, and input demand, even as pending orders reduced at a slower pace than before.
The services sector PMI held firm at 58.7, slowing slightly from 61 but still logging 13 straight months of expansion, backed by business activity, hiring, and fresh orders, with backlogs reverting to growth after two months of decline.
Despite the improved performance, forward business confidence softened slightly across all sectors, indicating calibrated optimism rather than exuberance.
The PMI is globally recognised — used in more than 50 countries since its inception in 1948 — for its ability to capture near real-time economic direction, providing corporations, investors, and policymakers a rapid pulse of market sentiment and sectoral shifts.
In October, inflation dropped to 8.17% from 8.36% in the previous month, while Bangladesh Bank held its policy rate at 10% with an expectation of a rate cut early next year.
Meanwhile, the yields of all treasury bills and bonds dropped below the policy rate from over 12% in June.
However, the economy is suffering from weak investment growth as the private sector waits for an elected government, adding to the slowdown, significantly triggered by the government’s austerity in development spending for fiscal consolidation.
