March reading of PMI falls by 2.9 points

The reading of the Purchasing Managers' Index (PMI) for Bangladesh in March 2025 declined by 2.9 points from the previous month to record a slower expansion rate at 61.7.

A PMI reading above 50 indicates that the sector/economy is generally expanding. A reading of 50 indicates no change compared to last month's, while a reading below 50 indicates contraction.

This latest PMI reading was attributed to a slower rate of expansion posted by agriculture, manufacturing and construction sectors, whereas the service sector posted a faster expansion rate.

"The latest PMI readings indicate slower expansion of the economy in March. Only the service sector managed to post faster expansion, driven by Eid festivity that is usually peak business window for retail sub-sector," said M Masrur Reaz, chairman and CEO of the Policy Exchange Bangladesh (PEB).

But he mentioned that the future business index for the service sector, however, posted first-time contraction after 15 months of expansion.

The PMI survey is aimed at offering timely insights to guide businesses, investors and policymakers in their decision-making.

The agriculture sector posted 6th month of expansion but at a slower rate. The sector posted slower expansion rates for the indexes of new business, business activity, input costs.

The order backlogs index reverted to a contraction. The employment index posted  faster contraction.

Meanwhile, the manufacturing sector posted 7th month of expansion but at a slower rate. The sector posted expansion readings for most indexes except for the order backlogs index, which posted a slower contraction rate.

The construction sector posted 4th month of expansion but at a slower rate. It posted slower expansion readings for the indexes of new business and input costs, whereas the employment index posted a faster expansion rate.

The construction activity index reverted to a contraction, whereas the order backlogs index posted a slower contraction rate.

The service sector posted 6th month of expansion and at a faster rate. It posted faster expansion rates for the indexes of business activity and employment, but slower expansion rates for the indexes of new business and input costs.

The order backlogs index posted a faster contraction rate.

The Bangladesh PMI is based on data compiled from monthly surveys of more than 500 private-sector enterprises.

Survey responses reflect a change in business activity, if any, in the current month compared to the previous month.

The headline numbers are derived using 'diffusion index' methodology, aggregating inputs from these companies on various indicators.

The methodology was developed by Singapore Institute of Purchasing & Materials Management (SIPMM), with technical inputs from the PEB.

The PMI was developed by MCCI and PEB with support from the UK government and technical assistance from the SIPMM.

jasimharoon@yahoo.com