In the first month of the year, the pace of expansion in the country’s economy slowed down slightly in January.
In January, Bangladesh’s overall Purchasing Managers’ Index (PMI) index decreased by 0.3 points to 53.9 compared to December. The value of this index in the previous month, December, was 54.2.
According to the latest PMI index, the expansion in the three sectors of agriculture, manufacturing and services continued in January.
In addition, the construction sector has returned to expansion after contracting in the previous month, which is seen as a positive sign for the economy.
However, a sector-wise analysis shows that the pace of expansion in the agriculture and manufacturing sectors has slowed compared to December.
In January, the value of the PMI index of the agriculture sector was 53 and that of the manufacturing sector was 52.1. On the other hand, the index value in the construction sector stood at 58.2 and in the services sector at 54.1, indicating relatively strong expansion.
This PMI index is published every month for the four main sectors of the country’s economy—agriculture, manufacturing, construction and services. If the index value is above 50, it indicates expansion in the relevant sector, and if it is below 50, it indicates contraction.
However, a different picture has emerged in the case of the future business index. There are indications of faster expansion in all the main sectors—agriculture, manufacturing, construction and services. This indicates that overall, businessmen are optimistic about the future economic situation.
According to the businessmen who participated in the survey, the overall business environment is currently weak and uncertain. Costs have increased significantly due to the increase in raw material, labor, transportation and production costs, but sales are not being made as expected. As a result, profitability in many sectors is under pressure.
In addition, the upcoming elections and political uncertainty are acting as a major concern in the field of business and trade.
As a result, work orders have been suspended, new investment is reluctant, and buyers are cautious.
Entrepreneurs also said that demand in some sectors has decreased further due to seasonal effects and imports. Many traders are hoping for an improvement in the situation after March or after the elections. According to them, the current high costs and cash crunch are creating additional pressure on business and commerce.
Policy Exchange Bangladesh chairman and CEO M Masrur Reaz said that the overall pace of economic expansion has slowed down. The slowdown in the global supply chain recovery and traders’ cautious stance in placing new work orders are negatively affecting exports.
He also said that the agricultural sector is also showing signs of recession due to the delay in the autumn paddy harvest. However, the continuous expansion in all major sectors of the economy in the future business index is giving a message of sustainable optimism in the long term.
Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange of Bangladesh jointly prepare and publish this PMI index every month.
The PMI index for January was published on Sunday.
