The Bangladeshi economy might have expanded in February, but at a slower pace due to sluggish growth in the construction and services sectors.

February marked the fifth consecutive month of expansion, driven by consistent growth in the agriculture and manufacturing sectors, according to the Bangladesh Purchasing Managers' Index (PMI) released today.

The agriculture sector posted a fifth month of expansion, while the manufacturing sector recorded a sixth month of expansion.

Both sectors grew at a faster rate, according to the PMI, a monthly index prepared by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB).

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Economy faces headwinds

The PMI is a forward-looking economic indicator designed to help understand the direction in which the economy is heading.

The PMI reading for the agriculture sector rose by 7.8 points to 66.4 in February, up from 58.6 in the previous month.

The manufacturing index increased to 72.6 last month from 68.5 in January, recording an expansion.

The PMI recorded faster expansion in new orders, factory output, input purchases, and supplier deliveries in the manufacturing sector.

However, there was slow growth in new exports, finished goods, imports, and employment.

Similarly, the construction sector posted a third month of expansion, albeit at a slower rate.

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Bangladesh’s economic resilience is being tested

At the same time, the services sector recorded a fifth month of expansion.

However, the pace of growth slowed, the MCCI and PEB said in a press statement.

PEB Chairman and CEO M Masrur Reaz said Bangladesh's PMI readings indicate sustained expansion for the fifth month, driven by continued growth in exports and a seasonal uptick in agriculture, while construction and services recorded slower expansion.

"Business confidence remains weak due to sluggish demand, energy disruptions, and continued protests. Sustained recovery depends on improved law and order, political consensus on the election roadmap, and expedited implementation of priority reforms," he said.

The MCCI and PEB launched the Bangladesh PMI in February 2024, covering key economic sectors based on survey data compiled from monthly surveys of over 500 private sector enterprises.

Survey responses reflect changes in business activity, if any, in the current month compared to the previous month.