Staff Correspondent:

Bangladesh’s economy expanded at a faster pace last month, as the July reading of the Bangladesh Purchasing Managers’ Index (PMI) increased by 8.4 points from the previous month, recording an expansion rate of 61.5.

This latest PMI reading was attributed to a faster expansion rate for the indexes of manufacturing and services sectors, a slower expansion rate for the agriculture sector, and a reversion of the construction sector to an expansion reading.

The monthly PMI, jointly published by the Metropolitan Chamber of Commerce and Industry, Dhaka, and Policy Exchange Bangladesh, is based on sectoral indicators of business activity, new orders, employment, costs, and backlogs. A score above 50 indicates expansion, while a score below 50 signals contraction.

“The latest PMI readings indicate that the overall Bangladesh economy expanded in July, primarily driven by growth in services and manufacturing sectors – with exports hitting an all-time monthly high of $4.77 billion. The agricultural sector, however, recorded slower expansion in July, reflecting the lean period and monsoon disruptions,” said M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh.

KEY SECTORS EXPAND

The agriculture sector posted its 10th month of expansion, but at a slower rate. The sector posted slower expansion rates for the indexes of new business, business activity, and input costs, but the order backlogs index posted a faster expansion rate.

The employment index posted a contraction reading for the second month and at a faster rate.

The manufacturing sector posted its 11th month of expansion, and at a faster rate. The sector posted expansion readings for the indexes of new orders, factory output, input purchases, finished goods, imports, input prices, supplier deliveries, and order backlogs. Both the indexes of new exports and employment posted contraction readings.

The construction sector reverted to an expansion reading after posting a first-time contraction reading in the previous month. The sector posted expansion readings for the indexes of new business, construction activity, input costs, and order backlogs. The employment index posted a contraction reading for the 3rd month.

The services sector posted its 10th month of expansion, and at a faster rate. The sector posted expansion readings for the indexes of new business, business activity, employment, input costs, and order backlogs.

In terms of the future business index, slower expansion rates were recorded for the indexes of agriculture, manufacturing, and services sectors, whereas the construction sector posted a faster expansion rate.