Bangladesh PMI rises in Feb riding on stronger agriculture, services growth

The February reading of the Bangladesh Purchasing Managers' Index (PMI) rose by 1.8 points in the previous month to reach 55.7, signalling a faster pace of expansion in the country's economic activity.

The latest reading indicates stronger growth in the agriculture, manufacturing and services sectors, although the construction sector slipped back into contraction during the month, according to a report released today (8 March).

The Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and Policy Exchange Bangladesh (PEB) released the PMI February report, according to the press release.

The report said the agriculture sector recorded its sixth consecutive month of expansion, with growth accelerating.

The index for new business and business activity expanded at a faster pace, while the indexes of input costs and order backlogs returned to expansion.

However, the employment index continued to contract, and at a faster rate.

The manufacturing sector remained in expansion for the 18th straight month, with growth gaining momentum.

Key indicators such as new orders, factory output, imports, input prices and supplier deliveries all continued to expand.

However, the indexes of new exports, finished goods and employment remained in contraction, while input purchases returned to expansion. The order backlogs index, meanwhile, reverted to contraction during the month.

The construction sector returned to contraction after expanding in the previous month. The sector saw contraction in the indexes of new business, employment and order backlogs, while the indexes of construction activity and input costs recorded expansion.

The services sector posted its 17th consecutive month of expansion, with growth accelerating.

The sector recorded expansion in new business, business activity, employment, input costs and order backlogs.

Looking ahead, the future business index signalled continued expansion across all major sectors – agriculture, manufacturing, construction and services – reflecting sustained improvements in business expectations.

Survey respondents across key sectors described a business environment marked by modest seasonal optimism ahead of Ramadan and Eid-ul-Fitr, alongside continued pressure from elevated input costs and uneven sectoral performance.

While stronger festive demand is expected to support sales, particularly in the services and retail sectors, businesses remain concerned about shrinking profit margins due to high raw material, labour and utility costs, according to the report.

Business expectations remain cautiously positive, though the construction sector and certain labour market indicators continue to show signs of weakness.

Overall, the near-term outlook appears seasonally supportive, but broader growth prospects remain constrained by persistent inflationary pressures, sector-specific bottlenecks and external economic risks, the press release said.

The February PMI indicates a modest, seasonally driven uptick in economic dynamism, said M Masrur Reaz, chairman and CEO of PEB.

It suggests a slight increase in economic activity, reflecting stronger demand in agriculture and services linked to Ramadan-related consumption, he added.

"The continued expansion of the future business index across major sectors signals sustained business optimism. However, escalating military conflict in the Middle East poses significant downside risks to growth expectations."