Colombia: Manufacturing PMI rises to nine-month high in April
The seasonally-adjusted Davivienda manufacturing Purchasing Managers’ Index (PMI) increased to 54.0 in April, following March’s 52.4 and logging the best reading in nine months. As a result, the PMI moved further above the 50-threshold, indicating a strong improvement of operating conditions in the manufacturing sector, at the outset of the second quarter.
April’s upturn was chiefly driven by a solid rise in new orders and a significant increase in output, amid improved demand conditions. In order to respond to new business firms hiked their input purchasing as well as staffing levels, with the latter rising at the quickest rate since January 2020. On the inflation front, higher costs owing to raw material shortages and logistics disruption pushed prices up further, with input cost inflation hitting a five-and-a-half year high. This was partly passed to customers, with output prices growing at the sharpest rate on record.
Andrés Langebaek Rueda, chief economist bolivar group at Davivienda, commented:
“In line with what is happening in the rest of the world, manufacturing activity in Colombia has been quite resistant to the second and third waves of COVID-19. […] This resilience is explained by the generalization of security protocols among companies in the face of an improvement in internal and external demand. […] It is important to mention that, in contrast to what happened with the manufacturing sector, our confidence indicator deteriorated significantly in April, suggesting that the commerce sector and other service activities were affected by the third wave of the virus.”