The New Nation - Internet Edition

BSS, Dhaka

Country's industries sector registered 5.6 percent growth in the first seven months of the current fiscal 2007-08 compared to the same period in the previous fiscal.

During the first half of the fiscal the sector was affected by sluggish investment and low export oriented manufacturing activities, head of economic unit of Asian Development Bank (ADB) R K Khan told BSS on Monday.

"But in the second half it rebounded with an upturn in the export- oriented manufacturing and effective measures taken by the government to restore business confidence," he said.

The sign of recovery in the manufacturing activities is supported by restored business confidence, increased import of industrial raw materials, rebound in exports of garments and increased private sector credit, Khan said.

According to ADB's recent quarterly economic update, in only January this year, the production of medium and large-scale industries rose sharply by 16.7 percent against the same period in 2007.

The output of small-scale manufacturing, which caters mostly to the domestic market, also expanded by 7 percent in the first half of current fiscal over the same period of the fiscal 2006- 07, said the outlook.

After witnessing a slowdown over several months, the business community and other stakeholders got relieved when RMG, the premier export industry of the country, sharply rebounded in the third quarter of FY2007-08, Khan said.

The RMG sector, which makes up more than 75 percent of the country's export basket, pulled up the overall export earnings growth to 12.4 percent during July-March of the current fiscal.

The RMG sector could not able to manage that much order before January 2007 due to political confrontation which had made a depression in the RMG export in July to September of the last year, Khan pointed out.

Improvements in compliance and labour relations, return of business confidence, increasing efficiency of Chittagong Sea Port and appreciation of currencies in major competing countries including India, China and Vietnam are believed to be contributing to rising RMG orders in Bangladesh, he said.

Another study, conducted by economist Dr Selim Raihan, showed that the business confidence has improved during first quarter of this year compared to the last quarter of the last year.

Better business confidence has shown in RMG, financial institute and pharmaceutical sectors in the first three months of this year.

Apart from the growth trend, the ADB's outlook said the construction activities, which maintained a strong growth over the past years, is likely to show a downtrend in FY 2007-08 because of a sharp increase of the price of construction materials including mild steel rod, cement, brick, bitumen and paint.