Oct PMI returns to expansion at 51.8 after 2 months

Bangladesh’s Purchasing Managers’ Index (PMI) has returned to expansion in October, reaching 51.8 points.

This marks a 3.2-point increase from September, as all four key economic sectors-agriculture, manufacturing, construction, and services recorded expansion after two consecutive months of contraction.

The Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB) jointly released the latest PMI reading on Sunday.

A press release on Monday stated that the index reflected faster growth in agriculture and a return to expansion in the manufacturing, construction, and services sectors.

According to the report, the agriculture sector recorded its 14th consecutive month of expansion, with its index rising by 6.0 points to 61.2 in October.

The sector’s new business, business activity, and employment indexes continued to expand, while order backlogs also returned to expansion. The input costs index remained in expansion.

The manufacturing sector returned to expansion with a 6.1-point increase, reaching 50.9 in October. Stocks of input purchases, stocks of finished goods, and imports also returned to expansion, while employment and supplier deliveries continued to expand.

However, new orders, new export orders, and factory output remained in contraction, while order backlogs recorded a sharp contraction. Input prices continued to show strong expansion, indicating persistent cost pressures in the sector.

The construction sector’s PMI increased by 2.5 points to 51.0, returning to expansion in October.
Employment in the sector also returned to expansion after remaining unchanged in September, while order backlogs continued to expand. However, new business and construction activity remained in contraction, and input costs recorded strong expansion.

The services sector posted a 1.3-point increase to 50.3, returning to expansion after two months of contraction.

Employment in the sector also returned to expansion, although new business, business activity, and order backlogs continued to contract. The input costs index maintained strong expansion.

Meanwhile, the Future Business Index recorded expansion across all four sectors, indicating positive expectations about future business conditions.

Commenting on the latest reading, Policy Exchange Bangladesh Chairman and CEO Dr. M. Masrur Reaz said the October PMI marked a small but positive development after two difficult months, supported particularly by stronger agricultural performance.

However, he cautioned that the recovery remained fragile, as new orders and business activity were still shrinking across manufacturing, construction, and services, while input costs remained elevated.

He said the divergence indicated that the return to expansion had yet to translate into a broad-based strengthening of demand.

Ensuring reliable energy supplies, easing working-capital constraints, and containing further increases in business costs would be critical to sustaining the recovery, he added.

He also said positive expectations for future business offered some encouragement, but translating confidence into investment and production would require more predictable operating conditions.

The Bangladesh PMI is a pioneering initiative developed jointly by MCCI and Policy Exchange Bangladesh, with support from the UK Government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM).

The index aims to provide timely insights into the country’s economic health to help businesses, investors, and policymakers make informed decisions.