Bangladesh’s Purchasing Managers’ Index (PMI) dropped sharply by 5.8 points in June, signalling a notable slowdown in industrial and business activity, according to official data released on Monday.

The index fell to 53.1 in June from 58.9 in May — the steepest monthly decline in over a year. While a reading above 50 still indicates expansion, the sharp fall points to weakening momentum across key sectors.

PMI is a leading indicator based on surveys of private sector firms, providing early signals on the performance of manufacturing and services. A PMI of 50 suggests no change in activity, while anything below implies contraction.

Despite staying above the neutral mark, June’s figure reflects slower growth in new orders, production, and supplier deliveries.

The index has shown marked volatility over the past year — peaking above 70 in mid-2024 before crashing below 40 by July. It had been on a steady recovery path through early 2025 but now appears to be losing steam again.

Analysts link the recent decline to subdued domestic demand, rising input costs, and uncertainty over fiscal policies.

“The economy is growing, but headwinds are clearly intensifying,” said Dr Masrur Reaz, Chairman of Policy Exchange of Bangladesh. He noted that the construction sector contracted for the first time in eight months.

Experts warn that if the PMI fails to rebound soon, it could signal a broader economic deceleration, potentially triggering policy actions to restore investor and consumer confidence.