Bangladesh’s economic momentum strengthened notably in July, as the country’s Purchasing Managers’ Index (PMI) surged by 8.4 points month-on-month to reach 61.5, indicating robust expansion in business activity.
The July PMI reading, jointly released on Thursday by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB), signals growing confidence in the national economy.
Developed with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM), the Bangladesh PMI is a pioneering initiative providing timely and reliable insights for businesses, investors, and policymakers.
According to the report, the strong performance was primarily driven by accelerated growth in the manufacturing and services sectors.
The construction sector returned to expansion after a brief contraction in June, while the agriculture sector, though still growing, expanded at a slower pace due to seasonal factors and monsoon-related disruptions.
Manufacturing recorded its 11th consecutive month of expansion, with growth observed across key indicators including new orders, factory output, input purchases, finished goods inventories, imports, and supplier deliveries.
However, the sub-indices for employment and new export orders showed contraction, suggesting some underlying challenges.
In the services sector, July marked the 10th straight month of expansion, with major indicators such as new business, business activity, employment, input costs, and order backlogs growing at a faster rate than in the previous month.
After contracting for the first time in June, the construction sector rebounded in July, with improvements in new business, construction activity, input costs, and order backlogs. Nevertheless, employment in the sector continued to decline.
The agriculture sector extended its growth streak to a tenth month, albeit at a reduced pace. Most sub-indicators, including new business and input costs, posted slower growth, while employment contracted further.
Looking ahead, business sentiment for the coming months showed a mixed picture: expectations for future activity slowed across agriculture, manufacturing, and services, while the construction sector reported an uptick in optimism.
The report said: “The latest PMI readings indicate that the overall Bangladesh economy expanded in July, primarily driven by strong performance in the services and manufacturing sectors supported by exports reaching an all-time monthly high of $4.77 billion.”
It added: “The agricultural sector, however, recorded slower expansion in July, reflecting the lean period and disruptions caused by the monsoon season.”
The sharp rise in the PMI underscores renewed economic vitality, though sectoral disparities and employment trends highlight areas requiring policy attention.
Source: UNB