Bangladesh's economy expanded at its fastest pace in months in July, with the Purchasing Managers' Index (PMI) climbing 4.9 points from June to reach 57.8, driven by a sharp rebound in manufacturing activity, according to a report released on Sunday.
The Bangladesh PMI, jointly compiled by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB), showed three of the four key sectors in expansion during July, with manufacturing posting the strongest performance at 65.4, followed by services at 56.0 and agriculture at 55.2. Construction remained marginally in contraction at 49.3, though it improved by 9.1 points from the previous month.
The index, developed with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM), is designed to provide timely, data-driven insights into the country's economic health for businesses, investors and policymakers.
Manufacturing recorded the sharpest turnaround of any sector, surging 16.6 points to 65.4 and making the largest contribution to the headline PMI reading. New orders, export orders, output, input purchases, imports, employment and supplier deliveries all expanded, though order backlogs remained in contraction, the report said.
Agriculture posted its eleventh consecutive month of expansion, even as growth moderated by 9.6 points to 55.2. New business and business activity stayed in expansion territory while employment slipped into marginal contraction, and input costs continued to rise sharply.
The services sector extended its expansion streak to 22 months, edging up 1.4 points to 56.0, with new business, employment and input costs all growing at a faster clip.
The Future Business Index showed strong expansion across all four sectors, pointing to elevated business confidence in the months ahead, the report noted.
"The July PMI signals broad-based strengthening of Bangladesh's economy, led by a sharp manufacturing rebound and continued expansion in agriculture and services," said M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh.
He added that the manufacturing recovery coincided with the highest monthly export earnings in 12 months, and that strong optimism across sectors reflects improving business confidence, stronger external-sector prospects, better foreign exchange conditions, and expectations of a more supportive business environment following the FY2026-27 national budget.
Despite the overall improvement, he noted construction remained marginally in contraction even as conditions improved.