Economic activities slowed in June: PMI

Bangladesh's economic activities slowed down in June from a month ago, as the construction sector contracted for the first time in eight months, while agriculture, manufacturing, and services recorded slower growth, according to the Purchasing Managers' Index (PMI).

The PMI, a forward-looking indicator used globally to gauge economic direction, stated that the economy has continued to expand for the ninth consecutive month.

However, the overall reading of the index declined 5.8 points to 53.1 in June.

The Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB) jointly prepared the PMI. A reading above 50 indicates expansion, and below 50 indicates contraction.

The pace of expansion slowed in June, and the construction sector recorded a contraction for the first time in eight months, said a press release yesterday

start of the monsoon, and changes in taxation anticipated in the national budget for fiscal year 2025-26 impacted economic dynamism in June, according to a press statement issued by the MCCI and PEB.

The latest figures show that the agriculture sector expanded for the ninth month, but at a slower pace.

The sector posted a first-time contraction in employment, but faster expansion was recorded in new business, business activity, input costs, and order backlogs.

The manufacturing sector grew for the 10th month.

However, the pace of expansion slowed here as well.

The sector posted contractionary readings in input purchases, finished goods, imports, and employment, said the PMI.

According to the press statement, growth in new orders, new exports, factory output, input prices, and supplier deliveries was slower in June than in the previous month.

Order backlogs returned to expansion after 10 months of contraction, it adds.

On the construction sector, it states, "The sector recorded contraction in new business, construction activity, employment, and order backlogs. The input costs index posted a slower expansion reading."

Meanwhile, the services sector posted its ninth month of expansion, but at a slower rate.

The MCCI-PEB press statement also sates that there was contractions in new business, business activity, and order backlogs, while faster expansion readings were recorded for employment and input costs.

The statement cites a Future Business Index, adding that slower expansion rates were recorded for manufacturing and construction, while faster expansion rates were recorded for agriculture and services.