The June reading of the Bangladesh Purchasing Managers’ Index (PMI) declined by 9.9 points from the previous month to 52.9, indicating a slower pace of expansion compared to the previous month.
The moderation in growth reflected mixed sectoral performance, with the manufacturing and construction sectors returning to contraction, while the agriculture and services sectors continued to expand, albeit at a slower pace.
Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and Policy Exchange Bangladesh (PEB) released the Bangladesh Purchasing Managers’ Index (PMI) June report on Tuesday.
The agriculture sector recorded its tenth consecutive month of expansion, though growth moderated.
Expansion was registered across new business, business activity, employment, and input costs, while the order backlogs index remained in contraction for the second consecutive month.
The manufacturing sector returned to contraction after two months of expansion. The weaker performance was attributed to contractions in new orders, new exports, employment, supplier deliveries, and order backlogs.
Although factory output, input purchases, and imports continued to expand, their pace of growth slowed. Meanwhile, input prices accelerated, and the finished goods index returned to expansion.
The construction sector also returned to contraction after recording expansion in the previous month. New business, construction activity, and employment all reverted to contraction. In contrast, input costs and order backlogs continued to expand at a faster pace.
The services sector expanded for the 21st consecutive month, but at a slower pace.
Slower rates of expansion were recorded in new business, business activity, employment, and input costs, while the order backlogs index registered a faster pace of contraction.
Looking ahead, the Future Business Index indicates continued expansion across the agriculture, construction, and services sectors, while the manufacturing sector is expected to return to expansion, reflecting cautious optimism regarding business conditions in the coming months.
Respondents across Bangladesh's major economic sectors reported that business conditions in June 2026 remained challenging amid rising production costs and weaker market conditions. Many firms indicated that higher LPG and fuel prices, increasing transportation and operating costs, and rising labour expenses continued to squeeze profit margins.
Several businesses also highlighted financial constraints, the adverse impact of ongoing road construction activities on business operations, and concerns over the recently imposed 15% VAT, which they believe has increased the cost of doing business.
Despite these challenges, respondents expressed hope that improvements in the overall business environment, stable energy supplies, and supportive government policies would help strengthen business confidence and economic activity in the coming months.
Several respondents also recommended maintaining a representative and high-quality respondent panel to further enhance the reliability of the Bangladesh PMI.
The June PMI suggests Bangladesh’s economy remained in expansion, but with clear sectoral divergence. Agriculture and services continued to grow more slowly, while manufacturing returned to contraction on weaker orders, exports, employment, and supplier deliveries, said M Masrur Reaz, chairman and CEO, Policy Exchange Bangladesh.
The PMI is an initiative that aims to offer insights into the country's economic health to help businesses, investors and policy makers take informed decision.
It was developed by MCCI and Policy Exchange, with support from UK Government and technical support from Singapore Institute of Purchasing & Materials Management (SIPMM).