The Purchasing Managers’ Index (PMI) for Bangladesh fell dramatically in July, dropping 27 points to a concerning 36.9, according to the Metropolitan Chamber of Commerce and Industry (MCCI). This sharp decline signals a significant contraction across key sectors of the economy. The MCCI’s “Bangladesh Purchasing Managers’ Index (PMI) Report” attributes this downturn to recent political instability, including widespread unrest, the resignation of the prime minister, and the subsequent collapse of the government. These events have had a profound impact on the economic landscape.
The report reveals that all major sectors—agriculture, manufacturing, construction, and services—experienced notable contractions. The agriculture sector, after six months of positive growth, reported sharp declines in new business, business activity, and employment. Although input costs increased, the order backlog index expanded at a slower rate. The manufacturing sector also faced a severe downturn after seven months of growth. The sector recorded significant contractions in new orders, exports, factory output, and supplier deliveries, though employment growth slowed. Faster expansion was noted in input purchases and prices, and the finished goods index reverted to expansion, despite a contraction in imports and a slower expansion in the order backlog index.
In the construction sector, which had previously seen seven months of expansion, there was a sharp decline in new business, construction activity, and employment. Despite this, the input costs index grew at a slower pace, and the order backlog index turned positive again. The services sector experienced a similar trend, ending seven months of growth with a sharp contraction in new business, business activity, and employment. The input costs index expanded at a slower rate, while the order backlog index showed a more gradual contraction.
Looking forward, the MCCI’s future business index indicates a slowdown in expansion for the agriculture and manufacturing sectors, while the construction and services sectors are showing signs of faster growth. This mixed outlook highlights the challenges and potential opportunities for Bangladesh’s economy amid ongoing political and economic uncertainties.
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