The overall Purchasing Managers’ Index (PMI) of Bangladesh declined by 5.8 points in June, reaching 53.1, according to the latest PMI index published jointly by the Metropolitan Chamber of Commerce and Industry and Policy Exchange Bangladesh on Monday.
The PMI of Bangladesh was 58.9 points in May of this year, according to the index published on Monday.
The index also said that the PMI is a pioneering initiative aimed at offering timely and accurate insights into the country›s economic health to help businesses, investors, and policymakers take informed decisions.Â
The latest PMI reading was attributed to a first-time contraction in the construction sector. In contrast, slower expansion rates were reported for the remaining key industries of agriculture, manufacturing, and services.
According to the index, the agricultural sector posted its ninth consecutive month of expansion, albeit at a slower rate.
The sector posted a first-time contraction for the employment index, but faster expansion rates were recorded for the indexes of new business, business activity, input costs, and order backlogs.
Moreover, the manufacturing sector has posted its 10th consecutive month of expansion, albeit at a slower rate.
The sector posted contraction readings for the indexes of input purchases, finished goods, imports, and employment. Slower expansion readings were recorded for the indexes of new orders, new exports, factory output, input prices, and supplier deliveries.
The order backlogs reverted to an expansion reading after having recorded contractions for 10 consecutive months.
The construction sector reverted to a contraction reading after posting six months of expansion.
The sector recorded contraction readings for the indexes of new business, construction activity, employment, and order backlogs. The input costs index posted a slower expansion reading.
The index stated that the services sector posted its ninth consecutive month of expansion, albeit at a slower rate.
The sector posted contraction readings for the indexes of new business, business activity, and order backlogs, whereas faster expansion readings were recorded for the indexes of employment and input costs.
In terms of the future business index, slower expansion rates were recorded for the manufacturing and construction indexes, whereas faster expansion rates were recorded for the agriculture and services indexes.
M Masrur Reaz, chairman and CEO, Policy Exchange Bangladesh, stated that the latest PMI readings indicated that the overall Bangladeshi economy continued to expand for nine consecutive months.
However, the pace of expansion slowed in June, and the construction sector recorded its first contraction in the last eight months.
‘The long Eid holidays, start of monsoon, and anticipated or actual tax changes in budget have impacted the economic dynamism in June,’ he added.
The PMI is based on data compiled from monthly surveys of over 500 private sector enterprises where the responders reflect the change in business activity.
A PMI reading above 50 indicates that the sector or economy is generally ‹expanding› where 50 indicates ‘no change’ and below 50 indicates a ‘contraction’.
