Bangladesh's PMI for January hits 65.7
Bangladesh's Purchasing Managers’ Index (PMI) for January 2025 surged by 4.0 points compared to December, reaching a robust score of 65.7, according to the latest report released on February 9, 2025.
The report was jointly launched by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB).
This pioneering initiative, supported by the UK Government and technically backed by the Singapore Institute of Purchasing & Materials Management (SIPMM), aims to provide timely and accurate insights into the country's economic health, empowering businesses, investors, and policymakers with data-driven decision-making tools.
Highlights of the January PMI report
The faster expansion rate in January was driven primarily by stronger performances in the agriculture, construction, and services sectors. However, the manufacturing sector reported a slower expansion pace during the same period.
Agriculture sector recorded its fourth consecutive month of expansion, albeit at a faster rate. Business activity, new business, and order backlogs in agriculture indices all showed expansion readings. Employment index contracted slightly, while input costs expanded at a slower pace.
Manufacturing sector maintained its fifth month of expansion but at a decelerated rate and indices such as new orders, new exports, factory output, input purchases, imports, input prices, and supplier deliveries exhibited slower growth. Finished goods index expanded more rapidly, and the employment index returned to positive territory after a brief contraction. Order backlogs in manufacturing sector continued to contract, albeit at a slower rate.
Construction sector achieved its second consecutive month of expansion, accelerating further. New business, construction activity, and input costs indices demonstrated faster expansion rates. Employment index contracted, and order backlogs shrank at an accelerated pace.
Services sector expanded for the fourth straight month, quickening its pace significantly. Indices including new business, business activity, employment, and order backlogs grew at a faster rate.
Input costs in services sector reversed their previous trend, showing signs of expansion.
Future business outlook
Despite the overall positive performance, the future business index revealed slower expansion rates across all key sectors—agriculture, manufacturing, construction, and services. This indicates lingering uncertainty among firms, particularly those serving the domestic market, due to factors like sluggish demand, rising operational costs, and disruptions in energy supply.
The report suggests that the economy's dynamism moving forward will depend heavily on clarity regarding the timeline and roadmap for transitioning to an elected political government. Increased confidence in new business investments and expansions could be hindered without such assurances.
Economic drivers behind the surge
Experts attribute the ongoing economic expansion over the past four months to growing exports boosting industrial activity, seasonal consumption trends driving demand, and strengthening agro supply chains supporting rural economies.
However, the sluggishness in future business expectations highlights challenges faced by domestic enterprises, which are grappling with weak consumer demand and escalating operational expenses.
