Economy might have regained pace in Dec: PMI

Bangladesh's economy might have regained pace in December, signalling a slightly faster pace of economic expansion, supported mainly by continued growth in agriculture, manufacturing and services, according to the Bangladesh Purchasing Managers' Index (PMI).

The December reading of PMI rose by 0.2 points month-on-month to 54.2 from 54 the previous month, said a press release by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), and the Policy Exchange Bangladesh (PEB). In October, the PMI reading was 61.8.

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

Agriculture posted its fourth consecutive month of expansion and at an accelerated rate, emerging as the strongest-performing sector, the release said.

"The latest PMI readings indicate a marginal expansion of the economy, driven by strong agricultural sector performance," said M Masrur Reaz, chairman and chief executive officer of PEB.

"The latest PMI readings indicate a marginal expansion of the economy, driven by strong agricultural sector performance," said M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh

The latest survey showed stronger expansion in new business, overall activity, employment and input costs. However, order backlogs continued to contract, albeit reflecting demand pressures easing only gradually.

Manufacturing remained in expansion for the 16th straight month, though the pace slowed marginally.

Positive readings were recorded across most key indicators, including new orders, new exports, factory output, input purchases, imports, input prices, employment, and supplier deliveries.

The finished goods index returned to expansion, while order backlogs showed a slower rate of contraction, indicating some improvement in demand conditions.

In contrast, the construction sector slipped back into marginal contraction after three consecutive months of growth.

The new business index contracted at a faster rate, while construction activity and employment posted slower expansion. Input costs rose at a slightly quicker pace.

Order backlogs continued to contract for the fifth consecutive month, though the rate of contraction eased.

The services sector extended its expansion streak to 15 months, with growth marginally faster than in November. Employment and input costs remained in expansion territory.

However, contraction was recorded in new business, business activity and order backlogs, pointing to softer demand conditions in parts of the sector.

Looking ahead, the future business index remained in expansion across agriculture, manufacturing, construction and services, although at slower rates in all sectors.

While manufacturing saw a second consecutive month of slowdown and construction reverted to contraction, sustained optimism persists, with growth momentum expected to continue in the post-election period, said the PEB chairman.

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.