Bangladesh's Purchasing Managers' Index (PMI) rose to 57.8 in July, pointing to a broad-based strengthening of the economy led by a rebound in manufacturing that coincided with the strongest monthly export earnings in nearly a year, according to a study unveiled on Monday.

The Metropolitan Chamber of Commerce and Industry (MCCI), in association with Policy Exchange Bangladesh, presented the findings at a seminar at the MCCI office in Gulshan.

The presentation showed agriculture and services continued to expand in July, while construction activity remained only marginally below the neutral 50-point threshold that separates expansion from contraction.

Manufacturing led the recovery with a reading of 65.4, followed by services at 56.0, agriculture at 55.2, and construction at 49.3.

The presentation described the PMI as a monthly, survey-based economic indicator that tracks the health of an economy through the responses of senior private-sector executives across agriculture, manufacturing, construction and services.

A reading above 50 indicates expansion, below 50 signals contraction, and exactly 50 means no change from the previous month.

Citing central bank and academic research, including from the European Central Bank, the US Federal Reserve Bank of Dallas, and the Federal Reserve Bank of St. Louis, the study noted that PMI readings are released ahead of official GDP data, are not revised after publication, and have historically shown a strong correlation with actual GDP growth in major economies.

The Bank for International Settlements has found PMIs to be reliable concurrent indicators of real economic activity, according to the presentation.

The Bangladesh PMI programme was conceptualised in 2022 in the backdrop of COVID-19 recovery, with concept development in early 2023 and formal initiation in November 2023 with support from the UK's Foreign, Commonwealth and Development Office (FCDO), in association with the Singapore Institute of Purchasing and Materials Management (SIPMM).

The first survey round was conducted in December 2023, followed by three additional rounds by March 2024 to finalise the methodology and build the survey panel.

The index currently draws on a panel of 400 companies across four sectors, 212 in services (53 percent), 92 in manufacturing (23 percent), 50 in construction (12.5 percent) and 46 in agriculture (11.5 percent), collectively representing about 100 percent of GDP-weighted coverage across major economic sub-sectors, including wholesale and retail trade, real estate, transportation, manufacturing (large, small and cottage industries), and crops and horticulture.

The presentation traced the PMI's trajectory from December 2023 to July 2026, highlighting sharp swings tied to specific shocks: a 27-point plunge between June and July 2024 during the July Uprising, when a nationwide curfew and a 10-day internet blackout shut factories, banks and the Dhaka-Chittagong highway; an 8.8-point drop between March and April 2025 linked to long public holidays, early US tariffs on apparel, and energy-supply constraints; a 7.8-point slide between October and November 2025 amid weak global demand and investment caution ahead of national elections; and a 9.9-point fall between May and June 2026 as manufacturing and construction slipped into contraction due to long Eid holidays, the monsoon onset, fading pre-Eid demand, and the introduction of a new 15 percent VAT.

The seminar also flagged persistent shortages in Bangladesh's economic data infrastructure, noting that surveys such as the Household Income and Expenditure Survey (HIES) and Labour Force Survey (LFS) are conducted only once every five and three years, respectively, leaving governments and businesses to plan on outdated data.

Speakers at the seminar said the improvement across sectors reflected firmer business confidence, a better external outlook, and expectations of a more supportive environment following the national budget.

They said this creates blind spots between survey rounds, prevents local-level policy targeting, and constrains private investment due to weak online data-sharing and limited transparency.

Frequent, rapid surveys and modern economic indices such as the PMI, they said, are essential to generate real-time insights and strengthen evidence-based decision-making across the economy.

The seminar drew participation from representatives of major Bangladeshi companies across the four surveyed sectors, including BRAC Bank, Standard Chartered Bank, Robi Axiata, Pran-RFL Group, Square Pharmaceuticals, Berger Paints, and ACI, among others.