Bangladesh PMI returns to expansion at 51.8 in Oct

Bangladesh's economic activities returned to expansion in October after two consecutive months of contraction, with the Purchasing Managers' Index (PMI) rising 3.2 points to 51.8, driven by stronger agriculture and a recovery in manufacturing, construction and services.

The October PMI report was jointly released by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB) on Monday.

According to the report, all four major sectors recorded expansion during the month, although weaknesses persisted in new orders and business activities in several sectors.

Agriculture maintained its expansion for the 14th consecutive month, with its PMI rising 6.0 points to 61.2. New business, business activity, employment and order backlogs expanded, although input costs remained high.

Manufacturing returned to expansion, gaining 6.1 points to 50.9. Stocks of input purchases, finished goods and imports expanded, alongside employment and supplier deliveries. However, new orders, export orders and factory output remained in contraction, while input prices rose sharply.

Construction PMI increased 2.5 points to 51.0, returning to expansion. Employment and order backlogs also improved, although new business and construction activities remained in contraction amid high input costs.

Services recorded a PMI of 50.3, up 1.3 points from September. Employment returned to expansion, but new business, business activity and order backlogs continued to contract, while input costs remained elevated.

Meanwhile, the Future Business Index indicated expansion across all four sectors, reflecting positive expectations for the coming months.

Commenting on the findings, Dr M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, described the return to expansion as a positive but modest development after two difficult months, supported mainly by stronger agricultural and export performance.

However, he cautioned that the recovery remained fragile, with new orders and business activities still contracting in manufacturing, construction and services, alongside persistent cost pressures.

He stressed the need for reliable energy supplies, improved access to working capital and lower business costs to sustain the recovery, adding that predictable operating conditions would be essential to translating positive expectations into investment and production.

The Bangladesh PMI is a joint initiative of MCCI and PEB, developed with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM).