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Colombia PMI July 2021

Colombia: Manufacturing PMI returns to expansionary terrain in July

The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 54.2 in July, following June’s 48.3, logging the best result in a year. As a result, the index moved well above the 50-threshold, signaling a robust improvement in business conditions from the previous month.

July’s upturn was largely attributed to the first expansion in new orders in three months. The return to normal business conditions, in light of the end to the country’s national strikes, spurred client demand, resulting in a marked expansion in output. This, prompted firms to ramp-up their input buying, at the fastest rate since April 2011, and increase their staffing levels at a notable pace. Against this backdrop, business confidence hit a 10-month high, also supported by the ongoing vaccination campaign and projects in the pipeline.

Meanwhile supply-side pressures, resulted in a spike in input cost inflation, which accelerated at the third fastest rate in surveys’ history, prompting firms to significantly hike their selling prices.

Commenting on July’s print, Andrés Langebaek Rueda, chief economist at Davivienda, added:

“Although Colombia is not fully recovered from the damage to infrastructure caused by the national strike in May, especially in the port of Buenaventura and in the city of Cali, it is very satisfactory to register a significant rebound in the PMI for July that anticipates good growth in manufacturing activity for the month. The five components of the PMI registered a significant rebound, especially employment.”

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