PMI fells 3.2 points in August to 58.3, signs slower recovery

Business Report :

Bangladesh’s economy showed signs of slower pace in August as the country’s Purchasing Managers’ Index (PMI) eased to 58.3, down 3.2 points from July, according to data released on Sunday.

The report, jointly prepared by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB), highlighted that while the economy has now expanded for 11 straight months, the pace has slowed with agriculture and construction slipping back into contraction.

Weaker performances across manufacturing and services drove the decline, while agriculture and construction slipped back into contraction, according to a press release.

The agriculture sector contracted after 10 months of expansion, with new business, activity, and input costs slowing, while order backlogs and employment also declined.

The manufacturing sector, meanwhile, registered its 12th consecutive month of expansion, though at a slower pace.

Growth in new orders, exports, factory output, and supplier deliveries was offset by contractions in order backlogs and employment, which declined for the third month in a row.

“Agriculture and construction contracted due to disruptions caused by the prolonged monsoon, while manufacturing and services also grew at a weaker pace, as reflected in the dip in export earnings in August,” said M Masrur Reaz, chairman and CEO of PEB.

Construction, which had expanded for the first time in July, slipped back into contraction in August.
Despite gains in new business, activity, and input costs, the sector faced contractions in order backlogs and employment for the fourth consecutive month.

The services sector marked its 11th month of expansion, though growth slowed. Business activity, new orders, employment, and input costs increased, but order backlogs contracted.

Looking ahead, future business expectations weakened in agriculture, manufacturing, and construction, though the services sector showed stronger optimism.

Respondents cited political instability, seasonal slowdown, and rising costs as factors weighing on activity, though some sectors benefited from sales linked to past orders and ongoing projects.

The PMI, developed jointly in January last year by MCCI and PEB with support from the UK Government and technical expertise from the Singapore Institute of Purchasing & Materials Management (SIPMM), provides timely insights into the country’s economic health to guide businesses, investors, and policymakers. It covers over 500 private sector firms across agriculture, manufacturing, construction, and services.