Bangladesh’s economy expanded at a slower pace in January, according to the latest Purchasing Managers’ Index (PMI) report jointly released by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB) on Sunday.
The overall PMI fell marginally by 0.3 points from December, settling at 53.9, signalling a moderation in growth across key sectors.
The report, prepared with technical support from the Singapore Institute of Purchasing & Materials Management (SIPMM) and backed by the UK Government, tracks economic activity in agriculture, manufacturing, construction, and services, providing a timely assessment of the country’s economic health for businesses, investors, and policy makers.
The agriculture sector recorded its fifth consecutive month of expansion, though at a slower rate. Growth in new business and business activity continued, while employment and input costs contracted. Order backlogs continued to shrink, albeit at a reduced pace.
Manufacturing remained in expansion for the 17th month, but growth eased. Key indicators including new orders, factory output, imports, input prices, and supplier deliveries showed continued growth. In contrast, new exports, input purchases, finished goods, and employment declined. Notably, order backlogs returned to expansion in January.
The construction sector returned to growth after a contraction in December. New business, construction activity, and input costs rose, while employment and order backlogs continued to contract.
The services sector maintained its expansion for the 16th consecutive month, with growth accelerating across new business, business activity, employment, input costs, and order backlogs.
Looking ahead, the future business index showed faster expected growth across all sectors, reflecting optimism despite prevailing challenges.
However, overall business sentiment remains subdued. Rising input costs, sluggish sales, political uncertainty ahead of the national election, and seasonal factors have dampened confidence. Businesses cited delays in orders, reduced investment, and cautious buyer behaviour as ongoing concerns.
Many respondents expect conditions to improve after March or following the election, though liquidity constraints and cost pressures continue to weigh on operations.
“Overall, the latest PMI readings indicate slower expansion, with weak global supply chain recovery and cautious order placement affecting manufacturing exports. The agriculture sector also slowed after the late autumn paddy harvests. Yet, the sustained growth in the future business index points to optimism ahead,” said Dr Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh.
The Bangladesh PMI is a pioneering initiative aimed at offering accurate and timely insights into the nation’s economic performance, helping stakeholders make informed decisions.
