Economic growth slows in Aug as key sectors lose steam: PMI

The country's economy grew in August, though at a weaker pace than the month before, as several sectors lost momentum, according to the latest Purchasing Managers Index (PMI).

The index fell to 58.3 in August, down from 61.5 in July, according to the index jointly prepared by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB).

As per the index, agriculture and construction contracted in the last month, while manufacturing and services posted slower growth.

"The latest PMI readings indicate that the overall Bangladesh economy continued to expand for 11 consecutive months, but at a slower rate," said M Masrur Reaz, chairman and chief executive of PEB.

The PMI is a forward-looking measure of business conditions used worldwide. A score above 50 signals growth, while a reading below 50 points to contraction.

The PMI publication, prepared by MCCI and PEB, tracks more than 500 private companies across agriculture, manufacturing, construction, and services

In August, agriculture shrank for the first time in nearly a year, with new business, activity, and input costs all easing. Order backlogs and employment also declined.

Manufacturing logged its 12th month of expansion, but gains in new orders, exports, production, and supplier deliveries were held back by falling backlogs and a third straight monthly drop in jobs.

"Agriculture and construction contracted due to disruptions caused by the prolonged monsoon, while manufacturing and services also grew at a weaker pace, as reflected in the dip in export earnings in August," said Reaz.

Construction, which had expanded in July for the first time in months, slipped back into contraction in August. New business and activity rose, but order backlogs and jobs continued to decline for a fourth month.

The services sector grew for an 11th straight month, though at a slower clip. Business activity, orders, employment, and input costs increased, but backlogs fell.

Meanwhile, confidence weakened in agriculture, manufacturing, and construction, while services showed greater optimism.

Businesses cited political uncertainty, seasonal factors, and rising costs as challenges, though some still benefited from earlier orders and ongoing projects.

The MCCI and PEB launched the PMI publication in January last year with support from the UK government.

It tracks more than 500 private companies across agriculture, manufacturing, construction, and services.