B Mirror Desk: For the second consecutive month, the nation’s economic growth has slowed. The nation’s business, commerce, and economic growth were measured by the Purchasing Managers’ Index (PMI), which was 61.7 in March, 2.9 points lower than in February. The index was 64.6 points in February, 1.1 points lower than it was in January. The PMI’s overall score in January of this year was 65.7.
The quota reform movement and the ensuing circumstances caused the nation’s economy to enter contraction mode in July 2024. It went back to expanding in October. The rate of expansion fell in December, despite an uptick in November. In January, the speed increased a little. Then, in February, it dropped a little further.
The PMI index is measured between zero and 100. If the index value is above 50, the economy is expanding and if below 50, it is contracting. And if the value is 50, it means that there was no change in the relevant sector that month. In July last year, the PMI value suddenly dropped to 36.9 points. In August, it increased slightly to 49.7 points. And in October, it rose to 55.7 points. Since then, the economy has been expanding.
The Metropolitan Chamber of Commerce and Industry (MCCI), a century-old organization of businessmen and entrepreneurs, and the research institute Policy Exchange of Bangladesh have been jointly formulating the PMI for a year, which provides an accurate and timely analysis of the country’s economic situation, so that businesses, investors and policymakers can make informed decisions. This index is formulated based on the four main sectors of the country’s economy. The four sectors are manufacturing, agriculture, construction and services.
The index figure for March shows that out of the four sectors, agriculture, manufacturing and construction – all three are slow. The slowdown was mainly due to the slow expansion rate of the agriculture, manufacturing and construction sectors, although faster expansion was observed in the services sector.
Although the expansion continued for six months, the pace took a major hit in March. The index was 66.4 in February, which fell to 58.2 in March.
Although the expansion continued for seven consecutive months, the pace slowed down. The index was 72.6 in February, and fell to 64.3 in March. In particular, the contraction trend is clear in the order backlog and employment indices.
Construction sector Has been expanding for four months. The index fell to 54.1 in March from 59.6 in February. Although the construction activity and backlog indices have a negative trend, the employment index is slightly positive.
Services sector Has been expanding for six consecutive months and is the only sector where the pace of expansion increased in March. It rose to 62.5 in March from 61.3 in February. The main reason for this is the increase in retail trade around the Eid festival.
Business activity and employment indices have seen rapid expansion, but new business and input cost indices have expanded slowly. The order backlog index has contracted faster. In terms of future business indices, the agriculture and construction sectors have expanded faster, while the manufacturing sector index was in slow expansion. The services sector index has returned to contraction for the first time in 15 months.
According to Mashrur Riaz, Chairman and CEO of the research firm Policy Exchange, the most recent PMI indices show that the nation’s economy expanded slowly in March. The Eid festival, which is typically the busiest period for the retail subsector, has caused only the services sector to grow more quickly. But after 15 months of growth, the future business index has shrunk for the first time.
