Bangladesh's purchasing managers' index (PMI) climbed to 55.7 in October, a 6.0-point spike from the previous month, thereby signalling an economic expansion after three consecutive months of contraction.
A PMI reading above 50 indicates that the economy is generally 'expanding'. A reading of 50 indicates 'no change' compared to last month's, while a reading below 50 indicates a 'contraction'.
The PMI data suggests an initial return to growth for Bangladesh's economy.
However, domestic issues like frequent protests from many quarters, poor law enforcement after August 05 and a slowdown in public administration are challenges to sustained expansion.
This turnaround was driven by reverted to an expansion in agriculture, construction and services, while the manufacturing sector recorded a faster pace of growth.
The Metropolitan Chamber of Commerce and Industry (MCCI) and the Policy Exchange Bangladesh develop PMI for Bangladesh with technical support from the Singapore Institute of Purchasing and Materials Management.
The PMI is funded by the UK International Development.
According to the latest PMI, the agriculture sector has returned to expansion after three months of decline.
Key improvements included first-time expansion of new business and business activities, while employment saw a slower contraction.
Input costs rose more rapidly, while order backlogs contracted at a slower rate.
Manufacturing saw an accelerated expansion, with growth in new orders, exports, factory output, input purchases and input prices.
However, contractions persisted in finished goods, imports, employment, supplier deliveries and order backlogs.
After three months of contraction, the construction sector registered a marginal expansion. Contractions slowed for building work, employment and order backlogs, although new business continued to contract slightly.
Input costs also saw a faster rate of increase.
The services sector also rebounded, ending its three-month contraction streak.
Business activities and order backlogs expanded for the first time, while new business growth slowed. Input costs accelerated, and the employment index showed a slower contraction.
"The latest PMI readings provide early indications of a return to expansion track for Bangladesh economy, with the PMI reverting to an expansion after recording three straight months of contraction," reads a PMI press release.
Although all key economic sectors post expansion readings, it says, Bangladesh continues to grapple with domestic challenges like frequent protests and slow improvements in law and order as well as a slowdown in public administration.
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