Bangladesh Economy Expands 11th Month in August, Slows

Representational image. Photo: collected

Bangladesh’s economic activities continued to expand for the 11th consecutive month in August, but at a slower pace compared to July, according to the latest Purchasing Managers’ Index (PMI) report released on Sunday.

The August PMI reading fell 3.2 points from the previous month to 58.3, indicating slower expansion, the report by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB) said.

Slower growth was seen in both manufacturing and services, while agriculture and construction reverted to contraction readings.

PMIs are widely used to assess monthly economic performance, compiling business managers’ and owners’ views on current and future production. Scores above 50 signal expansion, while below 50 indicate contraction.

The agriculture sector returned to contraction after 10 months of growth, with slower expansion in new business, activity, and input costs, and order backlogs also contracting.

The manufacturing sector expanded for the 12th month but at a slower pace. Indexes for new orders, exports, factory output, input purchases, finished goods, imports, input prices, and supplier deliveries showed growth. However, order backlogs and employment indexes remained in contraction.

Construction reverted to contraction after a brief expansion in July. While new business, activity, and input costs grew, order backlogs and employment fell.

Services expanded for the 11th month, albeit more slowly. New business, activity, employment, and input costs saw growth, but order backlogs contracted.

Slower expansion was also reflected in future business outlooks for agriculture, manufacturing, and construction, while services recorded a faster rate.

Respondents noted that political instability, seasonal slowdown, and rising costs weighed on business activity, though some sectors benefited from past orders and ongoing projects.

“The latest PMI readings show Bangladesh’s economy continues to grow for 11 months, but at a slower pace,” said Dr Masrur Reaz, chairman and CEO of PEB. “Agriculture and construction faced contraction due to prolonged monsoon disruptions, while manufacturing and services slowed, reflected in lower export earnings in August.”