Colombia: Manufacturing PMI hits second-highest level in series history in September
The seasonally-adjusted Manufacturing Purchasing Managers’ Index (PMI)—produced by IHS Markit and Davividenda—came in at 55.5 in September, up from August’s 53.2. September’s result marked the second-best performance on record. As a result, the index moved further above the 50-threshold, signaling a faster improvement in business conditions compared to the previous month.
The marked improvement came on the back of output expanding at the strongest pace in 14 months amid increased sales and more favorable economic conditions. Moreover, factory orders grew at the fourth-quickest pace in the series history on a demand pickup. As a result, employment levels rose robustly in September, albeit at a softer pace than in August. Turning to prices, input costs rose markedly again, with inflation hitting one of the highest levels since the series started in 2011. Costs increased due to ongoing input shortages, a stronger U.S. dollar and higher freight costs. Consequently, firms hiked selling prices, resulting in the second-highest output cost inflation rate on record.
Andrés Langebaek Rueda, chief economist at Banco Davivienda, commented:
“Growth projections for Colombia have been strongly corrected upwards in recent months in such a way that we are clear that the size of the economy will exceed that reached in 2019. The data we report today, with the second highest PMI in history, suggest that the GDP estimates we had for the third quarter of the year are going to fall short and that the economy will continue to grow more than expected. The absence of lockdowns, stoppages and limitations to the development of manufacturing activity as well as the low cost of credit explain this situation.”