Economy expands faster in July as PMI rises to 57.8

The country’s private-sector economy expanded at a faster pace in July, driven by a sharp rebound in manufacturing and continued growth in agriculture and services, according to the latest Purchasing Managers’ Index (PMI).

The country’s PMI rose 4.9 points from June to 57.8 in July, indicating a stronger pace of economic expansion, according to the PMI report released today by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB).

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Three of the four key sectors covered by the index recorded expansion, with manufacturing posting the strongest performance at 65.4, followed by services at 56.0 and agriculture at 55.2.

Construction, however, remained marginally in contraction at 49.3, despite a significant improvement from the previous month.

The sharpest improvement came from manufacturing, whose PMI jumped 16.6 points from June, making it the biggest contributor to the rise in the headline index.

Manufacturing recorded expansion in new orders, new export orders, output, input purchases, imports, employment and supplier deliveries. Input prices also increased, while order backlogs remained in contraction.

The manufacturing rebound coincided with the highest monthly export earnings in 12 months, suggesting an improvement in external demand and factory activity, according to the report.

The services sector continued its expansion for the 22nd consecutive month, with its PMI rising 1.4 points to 56.0.

New business, employment and input costs expanded at faster rates, while the contraction in order backlogs eased. Business activity also remained in expansion.

Agriculture, meanwhile, recorded its 11th consecutive month of expansion, although its PMI fell 9.6 points to 55.2.

New business and business activity remained in expansion, while employment moved into marginal contraction. Input costs continued to rise strongly, whereas order backlogs remained in contraction.

Construction remained just below the 50-point threshold at 49.3, signalling a marginal contraction. However, its PMI improved 9.1 points from June, with new business, construction activity and employment contracting at slower rates.

Input costs and order backlogs continued to expand in the sector.

The Future Business Index showed strong expansion across all four sectors, pointing to high optimism about business conditions in the coming months.

“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.

“The manufacturing recovery coincided with the highest monthly export earnings in 12 months, while construction remained marginally in contraction despite improving conditions,” he said.

“Strong optimism across all sectors points to improving business confidence, stronger external-sector prospects, improved foreign-exchange conditions, and expectations of a more supportive business environment following the FY2026-2027 Budget,” he added.