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Bangladesh's business activity lost momentum in March, with the latest Purchasing Managers' Index (PMI) pointing to a slowdown across key sectors.
While the economy continues to expand overall, emerging weaknesses in manufacturing and construction are raising concerns about the durability of growth.
The moderation comes against a backdrop of global uncertainty and domestic pressures, prompting cautious optimism among analysts about the near-term economic outlook.
The Purchasing Managers' Index (PMI), released Tuesday, fell by 2.2 points to 53.5 in March 2026.
A PMI reading above 50 indicates that the sector or economy is generally expanding. A reading of 50 signals no change compared to the previous month, while a reading below 50 indicates contraction.
The drop in the key gauge was largely driven by softer growth in agriculture and renewed contraction in both manufacturing and construction, even as services maintained a modest expansion.
The PMI, a forward-looking indicator used globally to gauge economic direction, is based on monthly surveys of more than 500 private sector firms in Bangladesh.
Agriculture, a key pillar of the economy often referred to as the "real economy", extended its expansion streak to seven months, though growth slowed.
Business activity and input costs rose at a more moderate pace, while order backlogs strengthened. However, declines in new business and employment pointed to emerging fragilities in the sector.
Manufacturing slipped into contraction for the first time in 18 months, weighed down by declines in new orders, exports, finished goods production, imports and employment.
Despite the downturn, factory output, input purchases, input prices and supplier delivery times continued to expand, while order backlogs returned to growth.
The construction sector remained under pressure, contracting for a second consecutive month as both new business and activity declined. Employment and order backlogs, however, rebounded, while input costs rose at a faster pace, underscoring persistent cost pressures.
By contrast, the services sector recorded its eighteenth consecutive month of expansion, with a slight acceleration in growth. Gains were broad-based, spanning new business, activity, employment, input costs and order backlogs.
Dr M Masrur Reaz, Chairman and Chief Executive Officer of Policy Exchange Bangladesh (PEB), said the latest readings reflect a moderation in economic activity, driven in part by a manufacturing slowdown linked to extended holidays and weaker global demand.
jasimharoon@yahoo.com