Bangladesh’s PMI records expand in all key sectors

Business Report:

The Bangladesh Purchasing Managers’ Index (PMI) for April registered a reading of 52.9, reflecting continued expansion in the country’s economic activities, though at a moderated pace compared to previous months.

This composite index, which tracks the performance of key economic sectors-manufacturing, construction, services, and agriculture-highlighted a mixed outlook marked by slower expansion in the industrial and services sectors and a faster pace in agriculture.

Sources said, the PMI, introduced in late 2023 as a joint initiative of the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh, is a pioneering tool aimed at providing real-time, data-driven insights into Bangladesh’s economic progress.

Supported by the UK Government and developed with technical assistance from the Singapore Institute of Purchasing and Materials Management (SIPMM), the PMI has quickly become a valuable resource for policymakers, businesses, and investors seeking to make evidence-based decisions in a dynamic economic environment.

The April reading builds on previous months’ trends. Since its inception, the PMI has consistently highlighted resilience across several sectors despite global uncertainties and domestic macroeconomic challenges such as inflationary pressure, foreign exchange instability, and supply chain disruptions. Notably, the index has remained above the critical 50-point threshold-indicating economic expansion-for the past several months, reaffirming the economy’s underlying momentum.

Commenting on the findings, Dr. M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, said, “The latest PMI readings indicate continued expansion in all key sectors, but at a slower rate. This suggests that while economic recovery remains on track, momentum may be tapering, warranting proactive policy support to sustain the pace.”

Among the sectors, agriculture emerged as the standout performer in April. It posted its seventh consecutive month of expansion and did so at an accelerated rate. Faster growth was noted in the sub-indexes for new business and overall business activity, suggesting robust demand and seasonal strength in rural economic output. Additionally, input costs in the sector grew at a slower pace, potentially signaling improving supply chain efficiency or lower cost pressures on farming inputs such as fertilizer and fuel. This stronger performance aligns with earlier trends observed in Q1 2025, where favorable weather and government support initiatives contributed to buoyant agricultural output.

Meanwhile, the manufacturing sector continued its expansionary streak for the eighth straight month but at a slower rate than March. While most sub-indexes showed expansion-including new orders, production, and employment-the order backlog index deteriorated further, posting its ninth consecutive month of contraction and at a faster rate. This may point to improving production efficiency or reduced pressure on supply chains, but it could also reflect waning order volumes in some manufacturing sub-segments. Earlier PMI readings in February and March had indicated a similar pattern-strong production amid slowing new orders-which appears to be continuing.

The construction sector extended its expansionary trend into the fifth month but also registered a slower rate of growth. New business, employment, and input costs all posted slower expansion, while the index for construction activity turned positive again after a temporary lull.