Bangladesh PMI Falls Below 50 in August as Manufacturing and Services Contract

📊 Dhaka, Bangladesh — Bangladesh’s overall economic activity contracted in August 2026, as disruptions to energy and power supplies weighed on business activity, according to the latest Bangladesh Purchasing Managers’ Index (PMI).

📊 The Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh (PEB) jointly published the PMI report for August on Tuesday, 8 September 2026.

📈 Headline PMI Falls to 49.9

📊 The headline PMI fell to 49.9 in August, slipping below the 50-point threshold that separates expansion from contraction. A PMI reading above 50 indicates an expansion in economic activity, while a reading below 50 signals contraction. A reading of 50 indicates stagnation.

📊 The latest PMI report attributed the slowdown across economic activities to disruptions in energy and power supplies, highlighting the growing impact of energy constraints on businesses.

🏭 Manufacturing PMI Sharpest Decline: Down 18 Points to 47.4

📊 The manufacturing PMI recorded the sharpest decline, falling 18 points to 47.4 in August. Key manufacturing indicators:

• 📉 New orders — reverted to contraction
• 📉 New export orders — reverted to contraction
• 📉 Output — reverted to contraction
• 📉 Stocks of input purchases — reverted to contraction
• 📉 Imports — reverted to contraction
• 📉 Employment — reverted to contraction
• 📈 Input prices — continued to rise at faster pace
• 📉 Order backlogs — remained in contraction (slower decline)
• 📋 Supplier delivery times — remained unchanged

💬 Manufacturing-sector respondents reported difficulties accessing funds through banking channels, shortages of electricity and gas, and weaker business activity due to reduced orders in the ready-made garment sector. They also called for lower fuel prices and reduced production costs.

💼 Services PMI Falls to 49.2 — First Contraction in 22 Months

📊 The services PMI fell 6.8 points to 49.2 in August, entering contraction for the first time in 22 months. Key services indicators:

• 📈 New business — continued to expand but at slower rates
• 📈 Business activity — continued to expand but at slower rates
• 📉 Employment — contracted sharply
• 📈 Input costs — continued to rise at slower pace
• 📉 Order backlogs — remained in contraction

💬 Services-sector respondents called for greater financial support, lower electricity bills and operating costs, as well as reductions in income tax and other taxes.

🌾 Agriculture PMI Rises to 56.5 — 12th Consecutive Month of Expansion

📈 Agriculture recorded a PMI of 56.5 in August, up 1.3 points from the previous month, marking its 12th consecutive month of expansion. Key agriculture indicators:

• 📈 New business — remained in expansion
• 📈 Business activity — remained in expansion
• 📈 Employment — increased
• 📈 Input costs — continued to rise strongly (slower rate)
• 📉 Order backlogs — remained in contraction

💬 Agricultural respondents called for lower prices of farm inputs, particularly pesticides.

🏗 Construction PMI Returns to Expansion at 52.4

📈 Construction, meanwhile, returned to expansion with a PMI of 52.4. Key construction indicators:

• 📈 Construction activity — moved into expansion
• 📈 Employment — moved into expansion
• 📉 New business — contracted at slower pace
• 📈 Input costs — expanded faster
• 📉 Order backlogs — moved into contraction

💬 Policy Exchange Chairman: Economic Resilience Despite Pressures

💬 Dr M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh, said the August PMI indicated that economic activity remained broadly near the neutral threshold despite temporary pressures on manufacturing and services.

💬 “Agriculture continued expanding, while construction returned to growth, highlighting underlying economic resilience,” he said.

💬 Reaz said the moderation in manufacturing partly reflected weaker monthly exports and temporary energy disruptions linked to LNG infrastructure maintenance.

📈 Future Business Index: Cautious Optimism

📊 The report said businesses remained cautiously optimistic about future conditions, with many respondents describing their current situation as satisfactory and expecting improvement in the coming months.

📊 However, respondents stressed the need to:

• 💰 Reduce business costs
• 💲 Increase access to finance
• 🏛 Ensure more supportive policy environment

📊 The Future Business Index showed a slight decline in optimism across all sectors.

🏛 PMI Background and Methodology

📊 The PMI is an initiative of the MCCI and PEB, developed with support from the UK government and technical assistance from the Singapore Institute of Purchasing & Materials Management (SIPMM).

🌏 Strategic Context: Bangladesh Economic Performance

📊 For Bangladesh’s economic trajectory, the August PMI data reveals several key insights:

• 🛢 Energy crisis impact — manufacturing and services hit by gas/electricity shortages
• 👕 RMG export weakness — reduced orders affecting manufacturing PMI
• 🌾 Agricultural resilience — 12th month of expansion
• 🏗 Construction recovery — return to expansion
• 💰 Input cost pressures — rising across all sectors
• 💲 Banking channel constraints — manufacturing facing funding access issues

📋 Implications for Bangladesh Policy

📊 For Bangladesh’s policymakers, the August PMI data suggests several priority areas:

• 🛢 Energy supply restoration — urgent need to resolve LNG/gas shortages
• 💲 Banking channel access — improve manufacturing sector credit flow
• 👕 RMG export support — address declining order volumes
• 💰 Input cost management — particularly fuel and farm inputs
• 💲 Financial support — especially for services sector
• 💰 Tax reduction — income tax and other tax relief for businesses

✅ For Bangladesh’s broader economic outlook, the August PMI data offers a mixed picture — with manufacturing and services contracting for the first time in 22 months, but agriculture and construction showing resilience. The energy crisis appears to be the primary driver of the contraction, suggesting that resolving LNG supply issues (with the Qatar delegation visit expected on 9 September) could be critical to restoring economic expansion in the coming months.

🌏 For the export community, the manufacturing PMI contraction — driven by reduced RMG orders — signals continued headwinds for Bangladesh’s garment sector. With US apparel imports contracting and EU demand softening, the August PMI data suggests that Bangladesh’s export momentum may remain under pressure through the remainder of 2026 — unless energy supply issues are resolved and global apparel demand recovers.