The September reading of the Bangladesh Purchasing Managers’ Index (PMI) fell by 1.3 points from the previous month to 48.6, indicating a slight contraction in overall economic activity.
The Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and Policy Exchange Bangladesh (PEB) released the PMI September report on Wednesday.
The decline reflected persistent weakness in manufacturing and a return to contraction in construction, while services remained marginally in contraction. Agriculture continued to expand.
The agriculture sector recorded its thirteenth consecutive month of expansion, although the index declined by 1.3 points to 55.2.
New business, business activity and employment recorded slower expansion, while input costs continued to expand strongly despite slight reduction.
Order backlogs remained in contraction, but at a slower rate.
The manufacturing sector declined by 2.6 points to 44.8, recording contraction.
New orders, new export orders, output, stocks of input purchases and finished goods, and imports continued to contract at a faster rate.
Employment reverted to a marginal expansion, while input prices continued to rise.
Order backlogs recorded a strong contraction, while supplier delivery times recorded a slower expansion.
The construction sector returned to contraction after expanding in August, declining by 3.8 points to 48.5.
New business and construction activity contracted, while employment remained unchanged. Input costs continued to expand strongly but at a slight slower rate. Order backlogs reverted to expansion.
The services sector recorded a second consecutive month of marginal contraction, declining by 0.2 points to 49.0.
New business and business activity reverted to contraction, while employment experienced slower contraction.
Input costs expanded strongly while order backlogs remained in contraction.
Respondent feedback for September reflected a cautious and mixed outlook for future business conditions.
Some firms expected activity to improve in the coming months, supported by confirmed orders, reliable buyers and the prospect of stronger seasonal demand during the approaching winter and peak business season.
However, many respondents remained concerned about repeated fuel and oil price increases, rising input and operating costs, weak consumer purchasing power, electricity and gas shortages, and limited access to bank financing.
Several firms also noted that prevailing economic uncertainty made it difficult to plan ahead, with some anticipating further deterioration if fuel prices and other cost pressures continue to rise.
Overall, the feedback indicates that business confidence remains cautious. Future prospects will depend largely on stronger domestic demand, reliable energy supply, improved access to finance and a reduction in cost pressures.
Looking ahead, the Future Business Index indicates expansion across all four sectors, reflecting cautious optimism regarding business conditions.
“The September PMI shows that Bangladesh’s economic dynamism remains under pressure, as weakness in manufacturing, construction and services weighed on overall performance. Agriculture’s continued expansion provides resilience, while slightly positive expectations across all sectors offer a basis for recovery. Strengthening domestic and export demand, ensuring reliable energy supply, easing financing constraints and containing cost pressures will be important to restore momentum,” said M Masrur Reaz, chairman and CEO, Policy Exchange Bangladesh.
The PMI is an initiative that aims to offer timely and accurate 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).