Bangladesh’s purchasing managers’ index (PMI) dropped a hefty 27 points from the previous month to record a sharp contraction at 36.9, shows the reading in the month of July.
This latest PMI reading was attributed to contraction readings recorded in all key sectors of agriculture, manufacturing, construction, and services, according to the PMI report of the Metropolitan Chamber of Commerce and Industries (MCCI) for the month of July 2024.
The report, released on Wednesday, said that the agriculture sector recorded a sharp contraction after 6 consecutive months of expansion. The sector posted a sharp contraction rate for the indexes of new business, business activity, and employment. However, the input costs index posted a faster expansion, whereas the order backlog index posted a slower expansion rate. The manufacturing sector also posted a sharp contraction after 7 consecutive months of expansion. The sector recorded a sharp contraction rate for the indexes of new orders, new exports, factory output, and supplier deliveries, whereas the employment index recorded a slower expansion.
However, faster expansion rates were recorded for the indexes of input purchases and input prices, and the finished goods index reverted to an expansion. The imports index reverted to a contraction, and the order backlog index posted a slower expansion rate.
The construction sector reverted to a contraction after 7 consecutive months of expansion. The sector recorded a sharp contraction in the indexes of new business, construction activity, and employment. However the input costs index posted a slower expansion rate, and the order backlog index reverted to an expansion.
The services sector posted a sharp contraction after 7 consecutive months of expansion.
The sector recorded a sharp contraction in the indexes of new business and business activity, a contraction in the employment index, a slower expansion in input costs index, and a slower contraction in the order backlog index.
In terms of the future business index, slower expansion rates were recorded for the key sectors of agriculture and manufacturing. However, faster expansion were recorded for the key sectors of construction and services.
“The recent events of widespread unrest that culminated in the eventual resignation of the Prime Minister and fall of the government, have also had an impact on the economy. All key sectors of the economy recorded sharp contractions as the previous regime resorted to extreme measures to regain control. Nonetheless, there appears to be a silver lining as the future business index of all key sectors posted expansion readings.”
The Purchasing Managers' Index (PMI) is a forward looking (or “leading”) economic indicator which helps understand the direction in which the economy is headed.
