PMI surges to 61.5 in July on strong manufacturing, services growth

Bangladesh's economic activity expanded at a faster pace in July, with the country's Purchasing Managers' Index (PMI) rising by 8.4 points to reach 61.5, according to the latest data released today (7 August).

The rise in the headline index was driven largely by robust growth in the manufacturing and services sectors, the report shows. The construction sector also returned to expansion territory after slipping into contraction in June, while agriculture posted slower growth amid seasonal challenges.

The PMI was jointly published by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB). The index is designed to provide timely insights into economic trends, enabling businesses, investors, and policymakers to make informed decisions.

"This latest PMI reading reflects a notable expansion in the economy, especially in manufacturing and services," said M Masrur Reaz, chairman and CEO of Policy Exchange. 

"Exports hit an all-time monthly high of $4.77 billion, underscoring the positive momentum. However, agriculture moderated due to seasonal factors and monsoon disruptions," he said.

Sectoral snapshot

Manufacturing continued its upward streak for the 11th consecutive month, posting stronger growth across several indicators including new orders, output, input purchases, and supplier deliveries.

However, both employment and new export orders posted contraction readings, signalling caution among producers despite higher overall activity.

Services marked its 10th month of growth, also at an accelerated rate. The sector posted expansion in all major areas, including new business, business activity, employment, input costs, and order backlogs.

Construction rebounded after its first-ever contraction in June. July data showed renewed expansion in new business, activity, input costs, and backlogs. However, employment in the sector remained in decline for a third consecutive month.

Agriculture posted its 10th straight month of expansion, though at a slower pace. Indicators for new business, activity, and input costs softened, while the backlog of orders increased. Employment in the sector continued to contract at a faster rate.

Despite the robust PMI headline, the report flagged concerns about the pace of future expansion. Slower growth was recorded in future business expectations across agriculture, manufacturing, and services. Only construction showed a faster rate of expected expansion.

The PMI initiative – developed by MCCI and PEB with support from the UK government and technical guidance from the Singapore Institute of Purchasing & Materials Management – is intended to offer a timely barometer of economic activity to inform businesses and policymakers.