Bangladesh economy on course for expansion

Bangladesh economy is seen on course for expansion as a parameter styled Purchasing Managers' Index (PMI) sows a rise by 7.9 points from the previous month to 70.1 in its reading.
This is the second-month publication as it was first launched for April last. It will be published each month.
A PMI reading above 50 indicates that the economy is expanding. A reading on 50 indicates no change compared to last month, while a reading below 50 indicates a contraction of the economy.
This index is a forward-looking economic indicator which helps understand the direction the economy is heading towards.
This latest PMI reading was attributed to a faster-than-before expansion in all key sectors of agriculture, manufacturing, construction, and services.
Agriculture recorded the 5th month of expansion-after having posted a contraction reading in December last year-pivoted by good harvests.
The food-producing sector posted a faster expansion rate for the indices of new business, business activity, employment, input costs, as well as order backlog. The employment index posted a second month of expansion.
The manufacturing sector posted a faster expansion for the key indexes of new orders, new exports, factory output, input purchases, and supplier deliveries.
However, the employment index posted a slower expansion rate. Faster expansion rates were recorded for the indices of finished goods, imports, input prices, and order backlog.
The construction sector posted a faster expansion rate for the indexes of new business, construction activity, employment, and input costs. However, the order- backlog index posted a second month of contraction.
The services sector had a faster expansion for the indexes of new business, business activity, employment, and input costs. The order-backlog index posted a slower contraction, and the order-backlog index had posted 5 months of consecutive contractions after posting an expansion in December last year.
In terms of the future business index, faster expansion rates were recorded for the sectors of manufacturing, construction, and services, while the agriculture sector shows a slower expansion rate. "The latest PMI readings indicate continued expansion in economic activities, with important sectors indicating positive trend, even though global uncertainties persist. This is in line with the expansion readings across most of the Asian region.
"The global markets are concerned about possible worsening of the ongoing geopolitical conflicts, as well as the macroeconomic risk of high inflation," says the PMI report.
First developed in the United States in 1948, it has since been utilized in over 50 countries for its accuracy and reliability in capturing the pulse of key sectors and the economy. It is widely used by investors, businesses and policymakers for making key decisions.
The Bangladesh PMI was initiated by the UK Government. Covering the key economic sectors, the Bangladesh PMI is based on data compiled from monthly surveys of over 500 private-sector enterprises. Survey responses reflect the change in business activity, if any, in the current month compared to the previous one.
The headline numbers are derived using 'diffusion index' methodology, aggregating inputs from these companies on various indicators, weighted. The methodology was developed by Singapore Institute of Purchasing & Materials Management (SIPMM), with technical inputs from Policy Exchange.

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