The overall Purchasing Managers’ Index of Bangladesh declined by 3.2 points in August, reaching a slower expansion rate at 58.3, according to the latest PMI index published jointly by the Metropolitan Chamber of Commerce and Industry and Policy Exchange Bangladesh on Sunday.
The PMI of Bangladesh was 61.5 points in July, which was a record 8.4 points increase than the previous month, June, according to the index.
This latest PMI reading was attributed to slower expansion rates for the indexes of both manufacturing and services sectors, whereas the sectors of both agriculture and construction reverted to contraction readings.
According to the index, the agricultural sector posted its ninth consecutive month of expansion, albeit at a slower rate.
The agriculture sector reverted to a contraction after recording its 10th month of expansion.
The sector posted slower expansion rates for the indexes of new business, business activity, and input costs, and the order backlogs index reverted to a contraction.
The employment index posted a contraction reading for the third month, but at a slower rate.
The manufacturing sector posted its 12th month of expansion, however, at a slower rate.
The sector posted expansion readings for the indexes of new orders, new exports, factory output, input purchases, finished goods, imports, input prices, and supplier deliveries.
The construction sector reverted to a contraction after posting a first-time expansion reading in the previous month.
The sector posted expansion readings for the indexes of new business, construction activity, and input costs.
The index stated that the services sector posted its 11th month of expansion, however, also at a slower rate.
The sector posted expansion readings for the indexes of new business, business activity, employment, and input costs, but the order backlogs index reverted to a contraction.
In terms of the future business index, slower expansion rates were recorded for the indexes of agriculture, manufacturing, and construction sectors, whereas the services sector posted a faster expansion rate.
Respondents highlighted that business activity remained weak due to political instability, seasonal slowdown, and rising costs, though some sectors saw temporary sales gains from past orders and ongoing projects, the PMI stated.
M Masrur Reaz, chairman and CEO, Policy Exchange Bangladesh, said that the latest PMI readings indicate that the overall Bangladesh economy continued to expand for 11 consecutive months, but at a slower rate.
‘The agriculture and construction sectors recorded contraction readings due to disruptions caused by prolonged monsoon, whereas the manufacturing and services sectors recorded slower expansion, as reflected in the dip in export earnings in August,’ he added.
PMI is a survey-based indicator of a sector or country’s business conditions, where the short surveys are held monthly and ask respondents to report the change in each variable compared to the prior month.
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’.
