The economic situation in Bangladesh improved in September compared to the preceding month but remains in a contractionary mode, suggests the latest Bangladesh Purchasing Managers' Index (PMI).

The Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh, which developed the PMI, released the latest analysis on Monday.

The PMI is based on monthly surveys conducted among senior private sector executives and it is meant to be a guide for predicting future economic trends, resource allocations and refining plans.

A PMI reading above 50 is said to indicate "expansion" while anything less represents "contraction".

Bangladesh's overall PMI score in September increased 6.2 points from August to reach 49.7.

It reflected slower contraction readings posted by the sectors of agriculture, construction and services, whereas manufacturing reverted to an expansionary trend.

The overall index suggests that the economy was gradually improving, despite some disruptions and challenges that the country was facing.

However, the economy has been in a contractionary mode for three consecutive months, far from the vibrancy witnessed prior to July.

The agriculture sector recorded contraction for the third month but at a slower rate. The sector posted a slower contraction rate for the indexes of new business, business activity, and employment.

The input costs index posted a slower expansion, whereas the order backlogs index posted a faster contraction.

The manufacturing sector reverted to expansion after recording two months of contraction. The indexes of new orders and input purchases reverted to expansion, but the new exports index reverted to contraction.

Faster contraction was recorded for the indexes of factory output and employment, whereas slower contraction was recorded for the indexes of finished goods and order backlogs.

The construction sector recorded contraction for the third month but at a slower rate. The new business index reverted to an expansion, but both indexes of employment and order backlogs reverted to contractions.