Bangladesh’s private sector growth slowed in March, with the Purchasing Managers’ Index (PMI) dropping 2.2 points from February to 53.5.
The slowdown was driven by contractions in manufacturing and construction, even as services and agriculture continued to expand.
The latest PMI, released jointly by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka and Policy Exchange Bangladesh, still indicates expansion but at a slower pace, mainly due to weaker growth in agriculture and downturns in manufacturing and construction.
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Agriculture extended its expansion streak to seven months, though at a slower pace.
Business activity and input costs grew modestly while order backlogs strengthened. However, new business and employment both declined during the month.
The manufacturing sector recorded its first contraction after 18 consecutive months of expansion, driven by declines in new orders, exports, finished goods, imports and employment.
Factory output, input purchases, input prices and supplier deliveries, however, continued to expand, and order backlogs returned to growth.
Construction posted its second straight month of contraction amid weaker new business and activity. Employment and order backlogs rebounded, while input costs rose at a faster pace.
In contrast, the services sector marked its 18th consecutive month of expansion, with slightly faster growth across new business, activity, employment, input costs and order backlogs.
The future business index signalled continued expansion across agriculture, manufacturing, construction and services, reflecting sustained business optimism despite cost pressures and uncertainty. Seasonal demand ahead of Ramadan and Eid-ul-Fitr supported some firms, though rising costs for raw materials, labour and transport continued to squeeze margins.
M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, said the March reading indicates moderating economic growth, largely due to a manufacturing slowdown linked to extended holidays and global demand uncertainty stemming from the Middle East crisis.
Masrur said the inflationary pressures and potential supply disruptions could further weaken economic momentum if the situation persists.