Export sector collapses, economy in dire straits: PMI index drops 7.8 points

Staff Correspondent

The country’s overall economic growth slowed in November as well. According to the latest Purchasing Managers’ Index (PMI) released by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB), the index fell 7.8 points to 54.0 from the previous month.

Although the index is above the expansion threshold of 50, economists say there is a clear slowdown in overall growth. This slowdown is likely to put additional pressure on investment, employment and production in the coming months.

The overall picture of the main sectors is seen in the agriculture sector. Although the expansion continues for the third consecutive month, the pace is very limited. New business and employment indicators are weak, and the atmosphere of caution is clear across the sector.

Despite 15 consecutive months of growth in the manufacturing sector, the order backlog has been falling rapidly—a sign of weakening demand. New and export orders, production, imports, and employment—all indicators have been slower than before.

The construction sector continued to expand, but the pace slowed. Construction activity, employment, and input costs increased slightly, but the new business index contracted again, indicating a cautious attitude towards new projects and investment.

Despite 14 consecutive months of expansion in the services sector, new business, business activity and order backlogs have all declined, clearly highlighting the weakness in domestic demand.

PEB Chairman and CEO Dr. M Masrur Riaz said that the slowdown in global demand, a lag in export competitiveness and a tendency to postpone investments before the elections have slowed the economic expansion. According to him, the monthly increase in exports and the progress of seasonal harvest in agriculture have helped keep the PMI still in the expansionary phase.

The report said the manufacturing sector is likely to continue to slow as the recovery in export orders remains uncertain. Economists say that weak exports and domestic demand hurt business.