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Bangladesh’s private-sector economy gained momentum in July, with broad-based improvements across most major sectors pushing the Purchasing Managers’ Index (PMI) up 4.9 points to 57.8, signalling a faster pace of economic expansion.
The latest Bangladesh PMI, released on Sunday by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB), showed a particularly strong rebound in manufacturing, while services and agriculture continued to expand. Construction, although still in contraction, also recorded a significant improvement.
The July reading suggests that business activity strengthened across much of the economy, with manufacturers reporting a sharp increase in new orders, output, exports, employment and input purchases.
The Bangladesh PMI is designed to provide timely indicators of economic activity for businesses, investors and policymakers. The index was developed by MCCI and PEB with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM).
Manufacturing emerged as the strongest-performing sector in July, with its PMI jumping 16.6 points from June to 65.4. It made the largest contribution to the rise in the headline PMI.
Expansion was recorded in all major manufacturing indicators, including new orders, new export orders, output, input purchases, imports, employment and supplier deliveries. Input prices also increased, indicating continued cost pressures on manufacturers.
Order backlogs, however, remained in contraction, suggesting that businesses continued to work through accumulated orders despite the improvement in new demand.
The sharp manufacturing rebound also coincided with Bangladesh recording its highest monthly export earnings in 12 months, pointing to stronger external demand and improved prospects for the export-oriented economy.
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 business activity remained firmly in expansion. The contraction in outstanding orders also eased, indicating some improvement in the sector’s capacity to handle existing workloads.
Agriculture recorded its 11th consecutive month of expansion, with its PMI standing at 55.2. However, the sector’s growth moderated by 9.6 points compared with June.
New business and business activity remained in expansion, although employment slipped into marginal contraction. Input costs continued to rise strongly, while order backlogs remained in contraction.
Construction remained the only major sector in contraction, with its PMI at 49.3. However, the reading improved substantially by 9.1 points from June, indicating that the sector may be gradually recovering.
New business, construction activity and employment continued to contract, but at slower rates. At the same time, input costs and order backlogs remained in expansion.
The Future Business Index showed strong expansion across all four sectors, reflecting a high level of optimism among businesses about economic conditions in the months ahead.
According to the PMI assessment, the broad-based improvement points to strengthening business confidence, better external-sector prospects and improved foreign-exchange conditions.
The report also suggested that businesses are expecting a more supportive operating environment following the FY2026-27 national budget.
“The July PMI signals broad-based strengthening of Bangladesh’s economy, led by a sharp manufacturing rebound and continued expansion in agriculture and services,” the report said.
It noted that the manufacturing recovery coincided with the strongest monthly export earnings in a year, while construction remained marginally contractionary despite improving conditions.
The July PMI therefore presents a more encouraging picture of Bangladesh’s economic trajectory, although rising input costs and continued weakness in construction remain areas to watch. The sustainability of the recovery will depend on whether stronger demand, exports and business confidence translate into sustained investment, employment and production in the coming months.