Staff Reporter :
Bangladesh’s economic activities faced significant setbacks in July due to disruptions in production and business operations, as well as the impact of violence, internet outages, and curfews imposed by the previous government in an effort to suppress protests.
This information comes from the latest Purchasing Managers’ Index (PMI) report. According to the “Bangladesh Purchasing Managers’ Index (PMI) Report” released by the Metropolitan Chamber of Commerce and Industry (MCCI) on Thursday, the PMI for July dropped sharply by 27 points from the previous month, plunging to a contraction level of 36.9.
The PMI, which is derived from monthly surveys of over 500 private sector enterprises, uses a mid-point reading of 50 to indicate ‘no change’ in economic conditions. Readings above 50 suggest economic ‘expansion,’ while those below 50 indicate ‘contraction.’
The report highlighted the severe impact of the aforementioned disruptions on economic activities, reflecting a broader decline in business confidence and operational stability.
The latest Purchasing Managers’ Index (PMI) reveals a downturn across all major sectors including agriculture, manufacturing, construction, and services, according to a statement from the Manufacturers’ and Commerce Chamber of Industry (MCCI).
The MCCI attributed the widespread economic contraction to recent political instability, which culminated in the resignation of the prime minister and the fall of the government.
“The recent events of widespread unrest that culminated in the eventual resignation of the prime minister and the fall of the government have also had an impact on the economy,” the MCCI stated in their report on the PMI.
All key economic sectors experienced sharp contractions as the previous administration took extreme measures to regain control. Despite these challenges, there is a glimmer of hope, as the future business index for all key sectors indicates expansion.
In detail, the agriculture sector has reported a significant contraction after six consecutive months of growth. The indexes for new business, business activity, and employment within the sector all saw sharp declines.
Conversely, the input costs index expanded at a faster rate, while the order backlog index experienced a slower rate of expansion.
The manufacturing sector also faced a sharp contraction following seven months of expansion. The sector saw significant declines in new orders, new exports, factory output, and supplier deliveries. Employment also showed slower growth. Nevertheless, input purchases and input prices expanded at a quicker pace, and the finished goods index reverted to expansion. Imports saw a return to contraction, and the order backlog index recorded a slower rate of expansion.
Similarly, the construction sector reverted to contraction after seven consecutive months of expansion. This sector recorded a sharp decline in new business, construction activity, and employment. The input costs index saw slower expansion, but the order backlog index returned to expansion.
The services sector also experienced a sharp contraction following seven months of growth. The indexes for new business and business activity saw significant declines, while the employment index contracted. The input costs index showed slower expansion, and the order backlog index experienced a slower contraction.
Looking ahead, the future business index indicates varied prospects for key sectors. Agriculture and manufacturing are expected to see slower expansion rates, whereas construction and services sectors are anticipated to experience faster expansion.