Economic activity in Bangladesh returned to expansion in October after two straight months of contraction. The country’s Purchasing Managers’ Index (PMI) rose 3.2 points from the previous month to 51.8.
All four main sectors of the economy, agriculture, manufacturing, construction and services, showed signs of expansion.
The Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB) jointly published the October PMI report on Sunday (9 November).
The report said agriculture expanded at a faster pace in October, its PMI rising 6 points to 61.2, the 14th consecutive month of expansion. The new business, business activity and employment indices expanded, and the backlog of work index returned to expansion, while input costs kept rising.
The manufacturing PMI rose 6.1 points to 50.9, returning the sector from contraction to expansion. Input and finished goods inventories and imports moved into expansion, and employment and supplier deliveries continued to expand.
The construction PMI rose 2.5 points to 51. Its employment index returned to expansion in October after holding steady in September, and the backlog of work index continued to expand.
The services PMI rose 1.3 points to 50.3, returning the sector to expansion. Employment moved back into expansion, but new business, business activity and backlogs of work are still contracting.
The report added that the future business index pointed to expansion in all four sectors, reflecting positive expectations about the business environment.
Dr M Masrur Reaz, chairman and chief executive of Policy Exchange Bangladesh, said the rise in the October PMI signalled limited but positive progress in the economy. After two difficult months the index has returned to expansion, helped especially by strong activity in agriculture and improving exports.
But he said the recovery remains fragile.
In his view, new orders and business activity in manufacturing, construction and services are still contracting, and input costs remain high. The expansion of the PMI therefore does not reflect a broad and strong improvement in overall demand.
To make the recovery sustainable, he said, it is essential to ensure an uninterrupted energy supply, ease the shortage of working capital and control rising business costs.
Although expectations of future business conditions are positive, a more predictable and stable business environment is needed to turn them into real investment and higher output, Dr Masrur Reaz said.
The MCCI and Policy Exchange Bangladesh compile the index with support from the UK government and technical help from the Singapore Institute of Purchasing and Materials Management. The PMI is a leading economic indicator that gives a timely picture of the economy and the direction of business activity.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report