Bangladesh’s composite Purchasing Managers’ Index jumped 4.9 points to 57.8 in July, its strongest reading in months, as a sharp manufacturing rebound coincided with the highest monthly export earnings in a year, according to a survey released this week by the Metropolitan Chamber of Commerce and Industry (MCCI) and Policy Exchange Bangladesh.
The composite index climbed from 52.9 in June, remaining well above the 50-point threshold that separates expansion from contraction. Manufacturing was the standout performer, surging 16.6 points to 65.4, its strongest reading in the survey’s history, with simultaneous expansion recorded across new orders, exports, output, employment, imports and supplier deliveries. Read Here
“The July PMI signals broad-based strengthening of Bangladesh’s economy, led by a sharp manufacturing rebound and continued expansion in agriculture and services,” said M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh. He noted the manufacturing recovery lined up with the highest monthly export earnings recorded in 12 months, a detail with direct relevance for Bangladesh’s ready-made garment sector, which anchors the country’s export economy and positions it as the world’s second-largest garment exporter.
Services expanded for a 22nd consecutive month, rising 1.4 points to 56.0, while agriculture posted its 11th straight month of growth, though its pace moderated by 9.6 points to 55.2. Construction stayed in contraction for a second straight month at 49.3, even as the reading improved 9.1 points from June’s series-low 40.2.
Reaz attributed part of the turnaround to improved foreign-exchange conditions and rising business confidence ahead of a more supportive policy environment following the FY2026-27 budget, which included deregulation measures announced last month. The Future Business Index showed strong expansion across all four sectors tracked, indicating purchasing managers expect conditions to keep improving in the months ahead.
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Order backlogs, however, remained in contraction across multiple sectors, a sign that the pipeline of future work stays thin despite the near-term upturn in activity. The caveat is notable for garment and textile supply chains, where stronger current-month exports and improved sentiment point to firmer factory activity in the short term, even as forward order visibility lags.
The PMI improvement arrives against a backdrop of persistent macroeconomic strain: Bangladesh has faced four years of inflation above 9%, alongside historically low private credit growth, making the July data a closely watched signal of whether a broader economic recovery is taking hold. The survey was developed with support from the UK government and technical assistance from the Singapore Institute of Purchasing and Materials Management.
The manufacturing PMI’s jump to a series high is likely to draw close attention from Bangladesh’s apparel exporters and buyers alike, given the sector’s outsized weight in the country’s industrial output and foreign-exchange earnings. A simultaneous rise in new orders, exports and employment within manufacturing suggests factories were running at fuller capacity in July than at any point since the survey began tracking the sector, even as global apparel sourcing continues to navigate tariff uncertainty and shifting buyer strategies across South Asia and Southeast Asia.
Bangladesh’s finance ministry has separately signalled openness to further deregulation and has urged US businesses to invest, part of a broader push to shore up investor confidence following recent political transition. Whether the improved foreign-exchange conditions cited by Reaz prove durable will hinge partly on remittance flows and the pace of reserve accumulation, both of which have shown signs of strengthening in recent months alongside easing inflation.
For now, the data offers a rare unambiguous positive signal for an economy that has spent much of the past four years managing elevated price pressures and tight credit conditions. Whether July’s rebound extends into August and beyond will depend on whether the current export and order momentum can translate into a rebuilding of backlogs, rather than a one-month surge driven by catch-up demand.