The private sector activity in the country expanded at a faster pace in February, driven by stronger growth in agriculture, manufacturing, and services, although the construction sector slipped back into contraction, according to the latest Purchasing Managers' Index (PMI).
The Bangladesh PMI rose to 55.7 in February, up from 53.9 in January, signifying a quicker expansion in overall economic activity, data released on Sunday showed.
A PMI reading above 50 indicates expansion, while a figure below that threshold points to contraction and at 50 "no change" compared to last month.
The survey, jointly developed by the Metropolitan Chamber of Commerce and Industry, Dhaka and Policy Exchange of Bangladesh with technical support from the Singapore Institute of Purchasing and Materials Management, is based on monthly responses from more than 500 private-sector firms.
The agriculture sector recorded its sixth consecutive month of expansion, and at a faster pace than in January.
Growth was supported by stronger new business and higher business activity, while input costs and order backlogs also returned to expansion.
However, the sector's employment index continued to contract and at a faster rate, suggesting that rising activity had yet to translate into job creation.
The manufacturing sector remained in expansion for the eighteenth consecutive month, with growth accelerating in February.
Key indicators, including new orders, factory output, imports, input prices, and supplier deliveries, all recorded continued expansion.
But the survey showed that new export orders, finished goods inventories, and employment remained in contraction.
Meanwhile, the index of input purchases returned to expansion, while order backlogs slipped back into contraction.
In contrast, the construction sector returned to contraction after expanding in January.
The sector reported declines in new business, employment, and order backlogs, although construction activity and input costs still recorded expansion.
The services sector maintained strong momentum, recording its seventeenth consecutive month of expansion, with growth accelerating during February.
It reported expansion in new business, business activity, employment, input costs, and order backlogs, reflecting robust demand.
Looking ahead, the future business index signalled continued expansion across all major sectors - agriculture, manufacturing, construction, and services - indicating sustained optimism among businesses about economic prospects.
"The February PMI indicates a modest, seasonally driven uptick in economic dynamism," said M Masrur Reaz, chairman and chief executive officer of Policy Exchange of Bangladesh (PEB).
He said the improvement reflected stronger demand in agriculture and services linked to Ramadan-related consumption, which typically boosted spending on food and retail services.
However, he warned that rising geopolitical tensions between US-Israel and Iran could cloud the outlook.
"Escalating missile attacks in the Middle East pose significant downside risks to growth expectations," he said.
Disruptions to global energy markets could affect Bangladesh's economic momentum in the coming months, he added.
The PMI, first developed in the United States in 1948 and now used in more than 50 countries, is widely viewed as a leading indicator of economic activity, helping investors, businesses, and policymakers gauge short-term trends in the economy.
jasimharoon@yahoo.com