Large manufacturing sector grows 7.8pc in May, but textiles slump

Country's large manufacturing sector posted a healthy year-on-year growth of 7.8 per cent in May 2025, reflecting signs of recovery and momentum across most industrial segments, according to the latest data from the Bangladesh Bureau of Statistics (BBS).

The rebound comes after a modest 4.0 per cent growth in April and a contraction of 1.13 per cent in August last year, signaling a gradual turnaround in the country's industrial output.

Clothing and textiles, together accounting for over 72 per cent of the manufacturing index weight (100), remain the key drivers of performance, making the broader index highly sensitive to changes in these sectors.

In May, the clothing segment surged nearly 12 per cent, lifting overall growth, even as the textile industry, the second-highest weighted component, shrank by 9.48 per cent.

This means that once the clothing sector growth slows then it drags down the broader manufacturing sector and vice versa.

This sector contributes to the country's GDP by more than 11 per cent and employs more than 5.0 million working forces, underscoring its critical role in the country's economy.

Out of the 23 divisions within the large industrial sector, only six manufacturing divisions experienced contraction during the month under review while 17 expanded.

Among the sectors that posted negative growth, the coke and refined petroleum declined by 5.68 per cent in the month, while chemical and chemical products fell by 5.3 per cent. Leather and related good also saw a contraction, shrinking by 4.47 per cent in May.

Among the sectors that posted robust growth, the clothing sector saw nearly 12 per cent, tobacco product by 9.47 per cent, manufacturing of electrical equipment by over 30 per cent, tobacco products by 9.46 per cent, basic metal by more than 10 per cent.

Economists and manufactures say that the economic activities began to get momentum after July-august, but the Trump administration proposal to hike tariffs from August by 35 per cent in addition to the existing 15 per cent has emerged as a new challenge.

Despite this they believe that once a clear roadmap for the next elections is in place, the economic activities will largely regain resilience and momentum.

Dr. M. Masrur Reaz, chairman and CEO of the Policy Exchange Bangladesh told the FE that the manufacturing sector is on an upswing adding: "There are some challenges in the economy yet as the US tariff and persistent higher rate of inflation,

Citing the S&P latest ratings of Bangladesh, he said that the global rating agency kept its grading unchanged. S&P Global on Friday rated Bangladesh as B plus meaning that there are still many uncertainties on the economy.

jasimharoon@yahoo.com