Bangladesh saw a slowdown in new business and employment growth in February compared to January, according to the latest Purchasing Managers’ Index (PMI) report.

The Metropolitan Chamber of Commerce and Industry, Dhaka, in partnership with Policy Exchange Bangladesh (PEB), released the PMI for February on Sunday, showing a decline of 1.1 points from the previous month, bringing the index to a slower expansion rate of 64.6.

The decline is attributed to slower growth in the construction and services sectors, although agriculture and manufacturing showed stronger performance.

The PMI, developed with support from the UK government and technical assistance from the Singapore Institute of Purchasing and Materials Management (SIPMM), aims to offer timely insights into Bangladesh’s economic health, supporting businesses, investors, and policymakers in their decision-making.

The agriculture sector in Bangladesh reported its fifth consecutive month of expansion, with growth accelerating across new business, business activity, input costs, and order backlogs.

However, the employment index indicated a slower contraction. Similarly, the manufacturing sector experienced its sixth month of expansion at an increased pace, marked by significant growth in new orders, factory output, input purchases, and supplier deliveries.

Despite this, the sector faced slower expansion in new exports, finished goods, imports, and employment, with order backlogs contracting more rapidly.

The construction sector saw its third consecutive month of expansion, although at a slower pace.

While new business and construction activity decelerated, input costs grew faster. Employment returned to expansion, while order backlogs contracted at a slower rate.

The services sector, expanding for the fifth consecutive month, also showed a slower rate of growth, particularly in new business, business activity, and employment.

The order backlogs index reverted to contraction, while input costs rose at a faster rate.

M Masrur Reaz, Chairman and CEO of Policy Exchange, highlighted that while Bangladesh’s PMI readings indicate sustained expansion, driven by strong exports and a seasonal boost in agriculture, slower growth was noted in construction and services.

He expressed concerns over weak business confidence, citing sluggish demand, energy disruptions, and ongoing protests as key challenges.

Masrur emphasised that a lasting recovery would require improved law and order, political consensus on the election roadmap, and the swift implementation of essential reforms.