Business expansion accelerates in July: PMI

The Bangladesh Purchasing Managers' Index (PMI) surged to 61.5 in July, marking an 8.4-point rise from the previous month and signalling a faster pace of expansion in the economy, according to the latest PMI data.

The increase was primarily driven by stronger performances in the manufacturing and services sectors.

The construction sector also rebounded to expansion after contracting in June, while growth in agriculture slowed during the month.

The PMI is a forward-looking indicator used globally to gauge economic direction. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.

Manufacturing marked its 11th consecutive month of expansion, supported by gains in new orders, factory output, input purchases, and imports.

However, the sector's new export and employment indexes both registered contraction readings.

The services sector posted its 10th straight month of growth, with faster expansion in new business, activity, employment, input costs, and order backlogs.

Construction returned to growth, posting expansion in new business, construction activity, and input costs. Its employment index, however, contracted for the third consecutive month.

Agriculture recorded its 10th month of expansion, but at a slower pace, owing to reduced activity and new business during the lean period and due to monsoon disruptions.

While order backlogs grew at a faster rate, employment declined for the second consecutive month.

The future business index indicated slower expansion in agriculture, manufacturing, and services, but a faster rate in construction.

"The latest PMI readings indicate that the overall Bangladesh economy expanded in July, primarily driven by growth in the services and manufacturing sectors, with exports hitting an all-time monthly high of $4.77 billion.

The agricultural sector, however, recorded slower expansion in July, reflecting the lean period and monsoon disruptions," said M Masrur Reaz, chairman and CEO of the Policy Exchange Bangladesh (PEB).

The MCCI and PEB began publishing the PMI in January last year. Initiated by the UK government, it covers over 500 private sector firms across agriculture, manufacturing, construction, and services.