Business activity rose in July: PMI

Bangladesh’s private businesses had a stronger month in July, with a big rebound in factories driving the improvement, according to the latest Purchasing Managers’ Index (PMI) report.

The PMI is a monthly score that shows whether businesses across the economy are growing or shrinking, based on a survey of purchasing managers at private firms. A score above 50 signals growth, below 50 signals contraction, and the further from 50, the faster the pace.

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In July, Bangladesh’s overall PMI score rose 4.9 points to 57.8, according to the report released yesterday by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB).

As per the report, three of the four sectors tracked by the index -- manufacturing, services, and agriculture -- were growing in July. Only construction was still shrinking, though even that sector came close to breaking even.

Manufacturing saw the sharpest turnaround, jumping 16.6 points to reach 65.4, making it the biggest contributor to the rise in the headline index.

The manufacturing rebound coincided with the highest monthly export earnings in 12 months, suggesting an improvement in external demand and factory activity, according to the report.

Factories reported more new orders, both from home and abroad, higher output, more imports and hiring, and faster deliveries from suppliers. The cost of raw materials also rose.

The report, however, notes that order backlogs remained in contraction.

The services sector kept up its long streak of growth, expanding for the 22nd month in a row. Its score rose 1.4 points to 56.0, helped by more new business, more hiring, and fewer unfinished orders piling up.

Agriculture also grew for the 11th month running, though its pace of growth slowed by 9.6 points, with its score moderating to 55.2. Farmers reported strong demand and steady activity, but employment in the sector dipped slightly, and rising costs for supplies remained a concern.

Construction stayed just below the growth line at 49.3 -- technically still shrinking, but 9.1 points better than June. New projects, construction work, and hiring in the sector all contracted at a slower pace than before, a sign it may be turning a corner.

The Future Business Index showed strong expansion across all four sectors, pointing to high optimism about business conditions in the coming months.

“The July PMI signals broad-based strengthening of Bangladesh’s economy, led by a sharp manufacturing rebound and continued expansion in agriculture and services,” said M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh.

“Strong optimism across all sectors points to improving business confidence, stronger external-sector prospects, improved foreign-exchange conditions, and expectations of a more supportive business environment following the FY2026-2027 Budget,” he added.