Bangladesh's economy might have expanded at a slower pace in April due to prolonged public holidays, the early impact of newly imposed US tariffs on garment exports, and continued disruptions in energy supply, according to the latest Purchasing Managers' Index (PMI).

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

In April, the PMI fell to 52.9 from 61.7 in March as the manufacturing, construction, and services sectors grew at a slower rate.

The agriculture sector recorded faster expansion, according to the PMI report jointly released today by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB).

The latest PMI reading marks the lowest level since October 2024, when the reading was 55.7.

"Long stretches of public holidays leading to the closure of businesses, the early effect of the Trump tariff on the production of apparel orders, and energy supply hurdles are likely causes of the slower dynamism," said M Masrur Reaz, chairman and CEO of PEB.

As per the latest PMI, the agriculture sector marked its seventh consecutive month of expansion, and at a faster rate.

The sector saw stronger growth in new business and business activity, while employment returned to expansion.

The manufacturing sector recorded its eighth consecutive month of expansion but at a slower pace.

The construction sector posted its fifth month of expansion, though growth slowed across new business, employment, and input cost indices. Construction activity rebounded from contraction, but backlogs worsened, according to the PMI.

The services sector extended its expansion streak to the seventh month. The sector, however, grew at a slower pace.

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.