Economy expanded at quicker pace in Sept: PMI

• Bangladesh PMI rises, signals stronger growth
• Manufacturing drives expansion, services slow slightly
• Agriculture, construction rebound after August contraction
• Employment index turns positive, outlook upbeat

Bangladesh's economy expanded at a quicker pace in September, as the country's Purchasing Managers' Index (PMI) climbed to 59.1, up 0.8 points from August, indicating renewed momentum across all major economic sectors.

This latest PMI reading was attributed to a faster expansion rate for the manufacturing index, but a slower expansion rate for the services index.

In contrast to August, when growth had moderated and both agriculture and construction had contracted, the September reading marks a strong rebound, shows the latest data, released yesterday in a joint report by the Metropolitan Chamber of Commerce and Industry (MCCI), Dhaka, and Policy Exchange Bangladesh (PEB).

For the first time in months, all four key sectors — agriculture, manufacturing, construction, and services — recorded expansionary readings, a sign that the economic recovery is regaining strength.

The PMI, a monthly composite index jointly developed by MCCI and PEB with technical support from the Singapore Institute of Purchasing and Materials Management and backing from the UK government, serves as a vital early indicator of economic health. It helps businesses, investors, and policymakers track momentum in real time.

As per the latest report, the manufacturing sector remained the primary driver of economic expansion, posting its 13th consecutive month of growth. The sector reported solid expansion in new orders, exports, production, and input purchases.

Importantly, the employment index turned positive, suggesting that firms are increasingly confident in the demand outlook. A slower rate of order backlog contraction also points to rising capacity utilisation.

Meanwhile, both agriculture and construction sectors, which had contracted in August, bounced back in September.

In agriculture, positive readings for new business, activity, and input costs, alongside easing contractions in employment and order backlogs, reflected improved weather and seasonal conditions.

The construction sector reversed four straight months of employment decline, supported by renewed hiring and rising construction activity. This rebound is linked to the rollout of fiscal year 2025–26 budget allocations and increased public sector investment.

The services sector marked its 12th straight month of expansion, though at a slightly slower rate than in previous months. New business, employment, and activity indicators all remained positive, but inflation, still the highest in South Asia, likely dampened consumer demand and raised operational costs.

OUTLOOK POSITIVE ACROSS MOST SECTORS

Forward-looking indicators suggest continued optimism.

"The latest PMI readings indicate that the overall Bangladesh economy continued to expand at a slightly faster rate in September," said M Masrur Reaz, chairman and CEO of PEB.

"Agriculture and construction sectors reverted to expansion after improvements in weather conditions and the gradual rollout of the new fiscal year budget. Meanwhile, the service sector posted a slower expansion reading, possibly due to persistent inflation, which is still the highest in South Asia."

According to a statement from the organisations, as Bangladesh's PMI rises above the 59-mark, the broad-based sectoral improvements and forward-looking optimism signal a more confident trajectory for the national economy moving into the final quarter of 2025.