The growth rate of Bangladesh’s manufacturing sector significantly declined in June, dropping from 76.3 in May to 61.7, according to data released by the Metropolitan Chamber of Commerce and Industry (MCCI). This decline has impacted various key indicators, signalling a slowdown in the overall growth of the sector.
The slowdown in the manufacturing sector has been reflected across several indices. The growth rates of new orders, new exports, factory output, input purchases, employment, and supplier deliveries have all decreased. This indicates a broad deceleration in the sector’s overall activities.
Experts have noted that this slowdown in the manufacturing sector could be the result of multiple factors. High raw material costs, instability in the international market, and reduced demand in the local market have played a major role in this decline. Additionally, ongoing supply chain issues since the COVID-19 pandemic have also contributed to the slowdown.
Moreover, indices for imports and input costs have also seen a reduction in growth rates. This suggests that the high cost of raw materials and other inputs is putting pressure on the manufacturing sector. Conversely, the backlog of orders index has risen rapidly, indicating an increase in unfulfilled orders. This clearly shows that many orders could not be completed on time, negatively impacting the overall efficiency of the sector.
The MCCI report further highlighted that the finished goods index, which had shown growth for three consecutive months, has now returned to contraction. This underscores additional challenges faced by the sector, such as difficulties in timely market delivery of products and disruptions in the production process.
Future business indices have also shown a slowdown in growth rates across all major sectors, including manufacturing. Experts believe that policymakers should take more effective measures to overcome this slowdown, such as controlling raw material prices, aligning with international markets, and boosting local market demand.
Many industrialists and entrepreneurs have expressed concern that this slowdown in the manufacturing sector poses a significant challenge not only for the sector itself but also for the country’s economy. They believe that these challenges can be overcome with the support and collective efforts of the government and relevant agencies.
Overall, the impact of this slowdown in the manufacturing sector is being felt across the entire economy. However, experts remain optimistic that with the right policies and actions, this slowdown can be overcome, and Bangladesh can once again achieve strong growth in the manufacturing sector.
