Colombia: Manufacturing PMI hits nine-month low in March
Business conditions in Colombia’s manufacturing sector deteriorated in March amid the ongoing Covid-19 pandemic. The seasonally-adjusted Davivienda manufacturing Purchasing Managers’ Index fell to 49.3 in March from 52.5 in February, marking the worst print since June 2019. Thus, the index dropped below the critical 50-threshold which indicates a deterioration in the health of the sector.
March’s reading largely reflected a fall in new work and output. New orders declined markedly in the last month of the first quarter as the spread of coronavirus weakened demand, while firms cut production at the fastest pace since January 2019 due to severed value chains and lower sales. As a result, hiring activity remained soft in March, with some firms reducing staff levels to offset declining revenues. On the price front, input as well as output charge inflation accelerated, partly due to a weaker peso against the U.S. dollar. Lastly, while the outlook remained positive overall, business expectations of future output dropped to a record low in March as firms raised concerns over the Covid-19 pandemic leading to prolonged economic fallout.