Colombia: Manufacturing PMI softens notably in August but remains in expansionary territory
September 1, 2020
The seasonally-adjusted Davivienda manufacturing Purchasing Managers’ Index (PMI) came in at 51.2 in August, markedly down from July’s 54.2. Despite the drop, the PMI remained above the 50-threshold, indicating an overall improvement in the operating conditions of the manufacturing sector.
August’s drop was largely driven by softer production growth and slightly faster job shedding. Output increased for the third month running, but at a considerably softer rate than in July, while new orders contracted for the fourth consecutive month, amid subdued demand and ongoing business closures prompted by Covid-19 containment measures. In addition, although business sentiment improved, manufacturers continued to shed jobs in August in an effort to reduce costs and make up for losses recorded during the peak months of the pandemic. Turning to prices, input cost inflation eased slightly but remained somewhat elevated due to a weaker currency and higher raw material prices.