Factory output growth slows

Growth of Bangladesh's factory output had slowed down last fiscal year of 2021-22, which analysts forecast was likely to prevail in the current fiscal year and could even be exacerbated by soaring prices, the global economic slowdown and ongoing gas and electricity crisis. 

Average production of large and medium manufacturing industries grew 13.7 per cent year-on-year in fiscal year 2021-22, as per the Bangladesh Bureau of Statistics (BBS).

In fiscal year (FY) 2020-21, it was 18.6 per cent.

The scenario played out for pharmaceuticals and mechanical chemicals, leather and leather related products, non-metallic mineral products and fabricated metal products, except for machinery.

Negative growth was witnessed in the production of food products and processing, chemicals and chemical products and tobacco products.

Apparel and basic metal production maintained buoyancy.

The national statistical agency collects industrial production data from 965 industries, both public and private, in 22 sectors on a monthly basis to assess the movement of industrial production.

The sectors include food processing, beverages, textile and garments, jute, leather, paper and printing, petroleum, chemical and chemical products, pharmaceuticals, plastic, steel, cement, edible oil and soap and detergent.

Despite the slowdown, a double-digit growth was still not bad, said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.

Major industrial sectors in Bangladesh showed a good performance in export market in fiscal year 2021-22, he said.

"It appears the demand for the domestic market-oriented products has declined. It may be that the buying power of people has not increased while the production cost of factories has increased," he said.

The production growth will worsen this year for multiple reasons, including the global economic slowdown, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.

Zaidi Sattar, chairman and chief executive of the Policy Research Institute of Bangladesh, said the double digit increase in production could still be termed high.

Industrial growth would have been higher if the Bangladesh economy had not suffered from the Russia-Ukraine war-induced shocks. In particular, import figures of June were affected due to government restrictions, he said.