Bangladesh’s industrial growth stalls in September as apparel and textiles slump

Bangladesh’s industrial sector posted a sharp slowdown in September, as steep declines in apparel and textiles dragged down overall output despite pockets of strong growth in heavy industries.

New data from the Bangladesh Bureau of Statistics (BBS) show that large-scale manufacturing — representing nearly 11% of the country’s US$461 billion economy — expanded by just 2.43% in September 2025. The figure marks a clear deceleration from 3%-plus growth in August and nearly 7% in July, the opening month of the 2026 fiscal year, when early indicators had suggested improving momentum.

The BBS industrial production index shows that seven of the 23 monitored subsectors contracted during the month, while 16 recorded growth. The readymade garment (RMG) sector, which carries a dominant weight of 61% in the index, fell by 5.6% year on year. Textiles, the second-largest category with an 11.6% weight, also declined by more than 6%.

The downturn stands in stark contrast to the Bangladesh Purchasing Managers’ Index, which rose 0.8 points to 59.1 in September, signalling faster expansion and highlighting a widening gap between sentiment indicators and actual output.

A notable outlier in the BBS data was tobacco manufacturing, which surged by more than 101% — an unusually large increase for a major industry. Strong double-digit growth was also recorded in basic metals (65.28%), other transport equipment (42.87%), automobiles (40.22%), and food products (14.33%).

However, contractions in several consumer-facing sectors added to the drag, including furniture (down 11.28%), leather and related goods (down 9.68%), and electrical equipment (down 4.83%). Economists say the dominance of apparel and textiles in the index means declines in these categories exert disproportionate downward pressure.

“When the highest-weight sectors fall, the overall index inevitably slows — this indicates a broader deceleration in industry,” said M Masrur Reaz, Chairman and CEO of Policy Exchange Bangladesh. He added that access to finance had recently improved for “genuine entrepreneurs”, contrasting this with past years when politically connected conglomerates “borrowed heavily but diverted funds into unproductive uses and abroad”.

Industry leaders expect some recovery in October and November as earlier bottlenecks — particularly difficulties in opening letters of credit — begin to ease.