PMI signals faster growth in May

Special Correspondent :

Bangladesh’s economy gained momentum in May, as reflected in the Purchasing Managers’ Index (PMI), which rose by six points from April to reach 58.9 — signaling a strong rebound following a three-month slowdown since February, according to the latest PMI report.
The PMI, a widely used forward-looking indicator of economic trends, signifies expansion when it reads above 50 and contraction when it falls below that threshold.
The May improvement was fueled by increased activity in agriculture, manufacturing, and services. In contrast, the construction sector showed no change in its rate of expansion.
Agriculture extended its growth streak to an eighth consecutive month, with faster growth recorded across new orders, business activity, employment, and input costs.
Significantly, the order backlog index — which had previously indicated contraction — shifted back into expansion territory, as noted in the PMI report jointly released by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB).
Manufacturing maintained its upward trend for the ninth straight month,

with a quicker pace of expansion. Most sub-indices, including new business and employment, showed improvement, although the order backlogs index remained in negative territory for the tenth consecutive month, albeit with a slower rate of decline.
Construction registered its sixth straight month of expansion, but growth remained flat compared to April. While construction activity and order backlogs picked up, both new business and employment slipped back into contraction. Input costs continued to rise, though more moderately.
“The latest PMI data reflect a faster pace of overall economic growth in Bangladesh, supported by robust manufacturing driven by exports and increased agricultural activity ahead of the Eid festival,” said M Masrur Reaz, chairman and CEO of PEB.
“Construction, however, remains the only sector that did not post further gains in expansion.”
The services sector also extended its growth trend, marking its eighth consecutive month of expansion — and at a quicker rate. New business and input costs rose more sharply, though employment growth slowed. Business activity and order backlogs, previously subdued, returned to positive territory.
Looking ahead, the future business index for agriculture showed stronger optimism. In contrast, future expectations across manufacturing, construction, and services sectors registered slower rates of expansion.
The MCCI and PEB began compiling and publishing the PMI in January last year. Supported by the UK government, the index covers responses from over 500 private-sector firms across four key areas: agriculture, manufacturing, construction, and services.