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Economy may have expanded in October: PMI
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Economy may have expanded in October: PMI

All key economic sectors in Bangladesh expanded in October, even as the country remains grappling with frequent protests, a slow improvement in law and order and a slowdown in public administration activities, the MCCI said yesterday .

Bangladesh’s Purchasing Managers’ Index (PMI) rose to 55.7 in October, the Metropolitan Chamber of Commerce and Industry (MCCI) said in its latest PMI report.

This is an increase of 6 points from the previous month, signaling a return to expansion after three consecutive months of contraction, according to a press release from the MCCI.

Bangladesh’s Purchasing Managers’ Index rose to 55.7 in October, the Metropolitan Chamber of Commerce and Industry said.

The Bangladesh PMI is an economic indicator that helps understand the direction in which the economy is heading and based on data compiled from monthly surveys of over 500 private sector companies.

It was developed in 2024 by MCCI and Policy Exchange Bangladesh, in cooperation with the Singapore Institute of Purchasing & Materials Management and supported by UK International Development.

A reading above 50 generally indicates expansion and below that contraction.

The October figure suggests a strengthening economic outlook, with all major sectors (agriculture, construction, manufacturing and services) showing positive trends, the MCCI said.

The manufacturing sector, a key pillar of Bangladesh’s economy, has demonstrated accelerated growth in key indicators including new orders, factory output and input purchases, despite continued contractions in employment, supplier deliveries and order books, the report said.

Agriculture recorded its first expansion in business activity and new orders after months of slowdown, although employment remained in contraction, it said.

Input costs, a key indicator, rose rapidly, reflecting rising spending across all sectors, the chamber said.

Construction returned to growth, albeit marginally, as it recorded slower rates of contraction in employment and backlogs, it said.

The services sector has also entered a phase of expansion, driven by a rebound in commercial activity and order books, even if the contraction in employment persists, the report adds.

However, the overall economy faces domestic hurdles, including public protests, law enforcement problems and stagnant public administration, which could affect short-term gains, the chamber said.

All sectors reported slower rates of expansion in future business expectations, reflecting cautious optimism in the face of ongoing challenges, the report said.