Service sector drives economy as industrial growth lags

Bangladesh recorded a total of 1.17 crore economic units in 2024, marking the slowest growth in nearly three decades, according to the final results of the Economic Census 2024 released by the Bangladesh Bureau of Statistics (BBS).

The census findings show that the number of economic units grew by around 50 per cent between 2013 and 2024, significantly lower than the 111 per cent growth recorded in the previous decade, indicating a notable slowdown in business expansion.

BBS defines an economic unit as a single establishment or an economic household engaged in activities aimed at generating profit, household income, or wider community benefit.

The findings were presented at a programme held at the agency’s headquarters in Dhaka.

Historical data show that Bangladesh had 21.68 lakh economic units in 1996, which increased by 71 per cent to 37 lakh by 2003, reflecting much stronger growth in earlier years.

The latest census also indicates that employment growth within these economic units has slowed to its lowest level in 28 years.

At present, around 3.06 crore people are engaged in economic activities under these units, representing a 25 per cent increase compared with 2013.

Sector-wise distribution shows a strong dominance of the service sector.

Wholesale and retail trade account for the largest share at 40.19 per cent of all economic units, followed by transportation and storage at 22.22 per cent.

The manufacturing sector, however, represents only 9.57 per cent, suggesting that nearly 90 per cent of economic activities are concentrated in services.

The census further reveals that economic units have expanded across both rural and urban areas, with rural regions contributing nearly two-thirds of the total number of establishments.

In terms of industrial composition, micro enterprises dominate the landscape, accounting for 57 per cent of economic units, while cottage industries make up 39 per cent.

Small industries represent 4.2 per cent, while medium and large industries contribute only 0.31 per cent and 0.08 per cent respectively, highlighting the limited presence of large-scale industrial operations in the country.

The findings underline the need for stronger industrial growth and diversification to accelerate employment generation and sustain long-term economic development, analysts say.