Colombia: Manufacturing PMI returns to contractionary terrain in May
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 46.7 in May, down from April’s 54.0. May’s result marked the worst reading since May 2020. As a result, the index dropped below the 50-threshold, signaling a deterioration in business conditions from the previous month.
May’s downturn largely reflected plunging output and new orders as the country’s national strike prompted business closures and weighed on client demand. Meanwhile, the country’s still-high number of Covid-19 infections and lingering restrictions exacerbated matters. Against this backdrop, manufacturers reduced employment levels for the first time since the beginning of the year and at the quickest pace on record. Moreover, firms markedly scaled back input buying, which, coupled with logistics disruptions, resulted in a sharp decline in stocks of finished goods. On the price front, input cost inflation accelerated to a joint 66-month high, prompting firms to hike their selling prices, albeit only marginally. More positively, manufacturers remained optimistic with regards to output in the next 12 months, on hopes of a swift end to the domestic unrest, and progressing vaccination efforts.