PMI rises slightly in December

PMI increased by 0.2 points in December from November to 54 point in November, remaining well above 50-point threshold that separates expansion from contraction. 

The report was jointly released by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB).
The PMI is a pioneering initiative aimed at providing timely and accurate insights into the country’s economic health to support informed decision-making by businesses, investors and policymakers.

It was developed by MCCI and Policy Exchange, with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM), said a press release.

According to the report, the modest improvement in December reflects sustained expansion in the agriculture, manufacturing and services sectors, although construction slipped back into contraction after three months of growth.

The agriculture sector recorded its fourth consecutive month of expansion, accelerating further in December. Stronger growth was observed in new business, business activity, employment and input costs, while order backlogs contracted at a faster pace, suggesting ongoing pressure on fulfilment capacity.

Manufacturing sector remained in expansion for the 16th straight month, though growth slowed slightly compared to November. 

Expansion was recorded across most key indicators, including new orders, new export orders, factory output, input purchases, imports, input prices, employment and supplier deliveries. 

Notably, the finished goods index returned to expansion, while order backlogs continued to contract, albeit at a slower rate.

In contrast, the construction sector reverted to marginal contraction in December. The new business index showed a faster rate of contraction, while construction activity and employment expanded at a slower pace. Input costs rose at a slightly faster rate. Order backlogs continued to decline for the fifth consecutive month, though the pace of contraction eased.

The services sector posted its 15th consecutive month of expansion with growth accelerating slightly. Employment and input costs remained in expansionary territory, while new business, business activity and order backlogs recorded contraction readings, highlighting uneven demand conditions.

Many respondents expressed expectations of gradual improvement from early next year.

Looking ahead, the future business index showed slower expansion across agriculture, manufacturing, construction and services, suggesting cautious optimism.

Commenting on the findings, Dr M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, said the latest PMI readings point to marginal economic expansion, largely supported by strong agricultural performance, reports BSS. 

“Manufacturing sector experienced a second straight month of slowdown, while the construction sector reverted to contraction. However, the future business index remained in expansion across all key sectors, suggesting sustained optimism and continued growth momentum in the post-election period,” he said.