Bangladesh’s inaugural Purchasing Managers’ Index (PMI) pointed to a slower expansion in business activity in April from a month earlier owing to a decline in growth in the services and construction sectors.

The PMI, which is seen as a good gauge of overall economic growth, came in at 62.2 last month, down by 2.1 points from March’s 64.3.

The PMI is a number from 0 to 100, with a reading above 50 indicating expansion and a reading below 50 representing contraction.

The Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) and private research organisation Policy Exchange Bangladesh have jointly launched the index, with the support of the UK Foreign, Commonwealth, and Development Office (FCDO).

The index report was published at an event at the chamber’s Gulshan office in Dhaka.

The PMI was based on data compiled from monthly surveys of more than 500 private enterprises covering key economic sectors. Singapore Institute of Purchasing and Materials Management (SIPMM) has developed it.

The PMI is a forward-looking indicator that helps understand the direction in which the economy is headed. It was first developed in the United States in 1948 and is currently being used by more than 50 countries for its reliability in capturing the pulse of the key sectors and the economy.

The latest PMI readings indicated the resilience of the economy in the face of domestic inflationary pressures and uncertainty stemming from ongoing geopolitical conflicts, according to the MCCI and the Policy Exchange.

The results suggested the overall economy has been growing after election-linked uncertainty passed.

It showed the agriculture and manufacturing sectors returned to an accelerated growth path in April after a slight deceleration in March, while services and construction sectors grew at a slower pace.

The agriculture PMI jumped to 60.9 in April from 55.7 a month ago while the manufacturing PMI surged to 74.5 from 68.4.

The construction PMI registered at 63.8 last month against 67.7 in March and the service sector PMI witnessed a drop from 63.6 to 56.2.

The construction and service sectors were in a slower expansion phase owing to higher input costs, said the report.

Speaking at the launch, M Masrur Reaz, chairman of the Policy Exchange, said: “It is a snapshot of the business situation of a country. It will be published every month.”

He said the Bangladesh Bureau of Statistics collects huge data. However, it is challenging to obtain data from the national statistical agency in a timely manner.

“Sometimes, it does not reflect the dynamism of the private sector. Therefore, the PMI index will be helpful for the private sector, the government and foreign partners to make data-backed decisions on time.”

Waseqa Ayesha Khan, state minister for finance, said Bangladesh needs efficient resource management and that requires correct data.

She believed the PMI would provide valuable insights into the economy, helping make proper, data-driven decisions.

Matt Cannell, deputy British high commissioner and development director to Bangladesh, said the PMI would assist policymakers and business leaders in making informed and timely investment decisions.

In any turbulent time, people need clear indications about businesses and the PMI will play an important role in this effect, he added.

MCCI President Kamran T Rahman said the index would be a vital tool for the government and the private sector when it comes to decision-making.

Stephen Poh, executive director of the SIPMM, Nihad Kabir, and Md Saiful Islam, both former presidents of the MCCI, also spoke.