Bangladesh’s economy might have expanded faster in October: PMI

Bangladesh's economy expanded at a quicker pace in October as the country's Purchasing Managers' Index (PMI) rose by 2.7 points from the previous month to 61.8, signalling faster expansion across all major sectors.

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.

The agriculture sector recorded its second consecutive month of expansion, with gains in new business, activity, input costs, and employment. Order backlogs, however, contracted at a faster pace, according to the latest report by the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), and Policy Exchange Bangladesh (PEB).

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"The latest PMI readings indicate that the overall Bangladesh economy continued to expand, primarily driven by favourable crop conditions and expectations of a good harvest in the agricultural sector," said M Masrur Reaz, Chairman and CEO of PEB.

Manufacturing extended its expansion streak to 14 months, supported by growth in new orders, exports, output, input purchases, finished goods, imports, employment, and supplier deliveries. Input prices also rose, while order backlogs contracted more sharply.

Construction registered its second month of expansion, with stronger readings for new business, activity, employment, and input costs. Order backlogs contracted, but at a slower rate compared with September.

Services marked their 13th month of expansion, with improvements in new business, activity, employment, and input costs. Order backlogs reverted to expansion after two months of contraction.

Other sectors of the economy also posted faster expansion rates going into the final quarter of the year, with monthly growth in exports and inflation gradually waning, said M Masrur Reaz.

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.