Colombia: Manufacturing PMI tumbles to contractionary territory in June
July 2, 2019
Business conditions in Colombia’s manufacturing sector deteriorated in June. The seasonally-adjusted Davivienda manufacturing Purchasing Managers Index fell from 50.8 in May to 49.2, thus landing below the critical 50-point threshold separating expansion from contraction.
Sales dipped amid increased competition and weak demand, as did new orders after two successive months of expansion. As a result, companies cut down production volumes. Meanwhile, due to constrained cashflows amid lower sales, firms also reduced their staff levels. On the price front, although input cost inflation rose to an over two-year high, output prices increased only modestly. Lastly, business confidence fell to its lowest level in one-and-a-half years, largely reflecting headwinds to output growth and increased competition from Chinese goods.
Author: Javier Colato, Economist