Bangladesh’s purchasing managers' index (PMI) improved by 6.6 points to 43.5 in August this year from July's 36.9, reflecting an improvement in the general economy as the month witnessed a slower rate of contraction in key sectors. However, the country's economy is in contraction.

A PMI reading above 50 indicates the sector is expanding, while a reading below 50 indicates a contraction.

The PMI data was released at a recent event organised by the Metropolitan Chamber of Commerce and Industry (MCCI) and the Policy Exchange Bangladesh (PEB) with support from the UK Foreign, Commonwealth and Development Office.

The latest PMI reading was attributed to contractions in the four key sectors of agriculture, manufacturing, construction and services, domestic media outlets reported.

The agriculture sector recorded a contraction for the second month but at a slower pace.

The manufacturing sector recorded a contraction for the second month, but at a slower rate. The sector posted a slower contraction rate for the indices of new orders and factory output, whereas the indexes of employment, input purchases, finished goods and order backlog reverted to a contraction. The indices of new exports, imports, and supplier deliveries reverted to an expansion.

The Bangladesh PMI was developed this year by the MCCI and PEB, in cooperation with the Singapore Institute of Purchasing & Materials Management (SIPMM) and supported by the UK International Development.