The Purchasing Managers’ Index (PMI) can play a vital role in quickly understanding economic momentum, business operations, and potential risks.
Acting as an effective "early-warning" signal, it captures shifts in business activity well before official statistics are published, offering timely insights into short-term trends.
These points were highlighted in a presentation at a PMI seminar held Monday (August 31) at the Metropolitan Chamber of Commerce and Industry (MCCI) branch office at Police Plaza, Gulshan.
MCCI and the private research institute Policy Exchange Bangladesh jointly organized the event.
Distinguished attendees included Adam Aspden, senior economic adviser at the UK’s Foreign, Commonwealth & Development Office (FCDO); Farooq Ahmed, secretary general and CEO of MCCI; and Hasnat Alam, economist and senior manager at Policy Exchange Bangladesh.
The seminar noted that the PMI tracks changes in business velocity based on survey input regarding new orders, output, employment, input prices, supplier delivery times, inventories, order backlogs, and future prospects.
Companies indicate whether conditions have improved, remained unchanged, or deteriorated compared to the previous month.
A PMI reading above 50 signifies expansion, while a score below 50 indicates contraction.
A primary advantage of the PMI is its rapid release. Unlike official figures for GDP, industrial output, or employment—which face publication delays—PMI data is available quickly, providing prompt indications of macroeconomic shifts.
The presentation illustrated how recent Bangladeshi PMI trends reflect various economic disruptions:
- July 2024: Nationwide protests, curfews, and a 10-day internet blackout caused the index to plunge 27 points from June down to 36.9, signaling a sharp severe contraction.
- March–April 2025: Extended public holidays, new US tariff pressures, and fuel constraints dropped the index by 8.8 points.
- October–November 2025: Weak global demand, reduced export competitiveness, and deferred investment ahead of national elections lowered the index by 7.8 points.
- May–June 2026: Long Eid holidays, the onset of the monsoon, subdued pre-holiday demand, and a new 15% VAT rate reduced the PMI by 9.9 points to 52.9—which still indicated overall expansion.
Bangladesh’s monthly PMI surveys 400 enterprises across four key sectors: Agriculture (46), Manufacturing (92), Construction (50), and Services (212).
International research highlights a strong correlation between the PMI and real GDP growth—up to 82% in the Eurozone and 83% pre-pandemic between quarterly PMI and initial GDP estimates.
Identifying trends early helps central bankers and policymakers formulate timely monetary, industrial, and trade policies.
Businesses can utilize PMI insights for supply chain negotiations, production planning, capital investments, risk management, and market analysis across financial sectors.
The seminar emphasized expanding sector-specific PMI data—particularly for RMG, MSMEs, and services—and integrating it with Business Confidence Indexes to enhance economic forecasting and evidence-based decision-making.
