| Updated:
September 24, 2022 11:17:10 a.m.

Overall production in Bangladesh’s large and medium industries has surged, propelled by the export-backed garment sector, but many others have seen a slump according to the latest data.

Many believe the country has been reeling from the impact of war in Ukraine on the heels of pandemic shocks that have disrupted supply chains.

They designate the clothing sector as having the greatest weight in the production chain because of its leverage effect on export trade, and that is why any change has an impact on the index linked to the productivity.

Such a picture emerges clearly from the Bangladesh Bureau of Statistics (BBS) report on the Quantum Index of Large and Medium Industries.

The index, based on units of quantity of goods such as count or weight, rose more than 11% last June compared to the same period a year earlier.

Clothing manufacturing has the largest weight with almost 35% out of 100. And its quantum index increased by 45.35% in June 2020 compared to the same period a year ago, according to published BBS statistics recently.

But, the second largest weight holder in the index — textile manufacturing — fell 12.25% over the review period. Textiles weigh more than 14%, the second highest weight considering its size, production and employment.

Food manufacturing, the index’s third key category, fell nearly 15%. Its weight in the index is around 11%.

The fourth largest industry is Pharmaceuticals and Medicinal Chemicals Manufacturing, by weight distribution, which fell slightly by more than 2.0% during the review period.

Manufacturing of leather and allied products fell almost 19% during the reference period in June 2021.

However, manufacturing of beverages with less than 1.0% weight in the index increased significantly to nearly 49% year-over-year.

Paper and paper products also jumped 44.56% during the reporting period. It also represents less than 1.0% by weight.

Manufacturing of rubber and plastic products increased by 21.26%.

The national data collection agency said furniture production also grew by more than 8.0 percent during the reporting period.

The BBS prepares the quantum index of medium and large scale manufacturing industries by major industry groups. It now consists of 31 major industries.

The agency said the provisional quantum indexes of major industries for June 2022, with the base year 2005-06, were compiled based on the latest data provided by the source agencies.

“Since large industries contribute heavily to revenue collection and job creation, any change in their growth impacts government and business sentiments accordingly,” he said.

The government is now pursuing austerity and the Bangladesh Bank has imposed strict import controls on some luxury goods. According to many accounts, the two measures could reduce production in the coming months.

However, a regional development bank says domestic demand could be weaker alongside a gloomy export outlook due to slow growth in advanced economies.

The government, in its budget speech, estimated that the economy will grow by 7.5%. But the latest report from the Manila-based Asian Development Bank lowered it to 6.6%.

The AfDB assumes that domestic demand could be slower in the current fiscal year and demand for exports from advanced economies could be weak, due to high inflation and fuel shortages.

Bangladesh Bank’s Chief Economist Dr Md Habibur Rahman says, “These are very realistic and representative data.”

He found apparel growth almost similar to shipping numbers.

Overall growth of 11% is very good considering the covid shocks which have significantly disrupted global and domestic supply chains, he told the EF.

Dr Rahman noted that there was a significant increase in beverage production, as high humidity levels due to climate change could be the push.

“The level of humidity is now high and people are drinking beverages in uncomfortable conditions and their prices have remained almost the same for a long time,” says BB’s chief economist.

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