Bangladesh’s economy recorded a stronger performance in May as the country’s purchasing managers’ index (PMI) climbed to 58.9-up six points from April by official count.
The PMI rise indicates a faster pace of economic expansion across key sectors, in a rebound from certain recent upsets, economists say in their interpretation of the purchasing-index upturn.
The latest data show agriculture, manufacturing, and services sectors all posted robust gains.
However, the construction sector stagnated with no month-on-month change in overall expansion.
Analysts say the May figures reflect a robust momentum ahead of the Eid season and improving external demand, particularly for manufacturing exports.
However, risks remain, particularly in the construction sector, which has struggled to maintain consistent growth.
“The May PMI readings indicate that the overall Bangladesh economy grew at a faster rate, riding on the export-led manufacturing buoyancy and uptake in agriculture and its supply chain ahead of Eid festival,” says Dr M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh.
“The construction sector, however, remains the only sector without any growth in expansion,” he adds.
Agriculture posted its eighth consecutive month of expansion, with accelerated growth in new business, business activity, employment, and input costs.
Notably, the order-backlog index returned into positive territory.
Manufacturing marked its ninth straight month of expansion, benefiting from strong new business and production activity. However, the order backlogs index continued to contract, albeit at a slower pace-extending its contraction streak to ten months.
Services saw faster growth in May, with significant gains in new business and input costs. Employment growth moderated, but both business activity and order backlogs rebounded into expansion.
Construction remained flat compared to the previous month. While construction activity picked up and order backlogs improved, new business and employment both declined, signaling a mixed bag for the sector.
The future business outlook saw slower expansion in manufacturing, construction, and services, while agriculture remained upbeat with a faster expansion rate.
jasimharoon@yahoo.com