Colombia: PMI climbs to 19-month high in April
May 2, 2018
The seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI) climbed to a 19-month high of 52.1 in April, up from 50.7 in March. The index therefore moved further up from the critical 50-point threshold that separates expansion from contraction in manufacturing output.
A faster pace of expansion in new orders was the principal factor behind the upturn in the headline print. Sales were up for the second month running and grew at the sharpest rate in over one-and-a-half years due to new product launches and higher demand from the domestic and external markets amid buoyant economic conditions. In response to increased demand, firms scaled up production and boosted their intake of workers. The upturn in workers was, however, insufficient in averting a rise in outstanding business. To meet the greater production requirements, manufacturers bought additional inputs.
While prices for inputs rose in April at the sharpest rate since October last year, inflation softened from the previous month. Business confidence remained high in April on the back of improved projections on sales growth, export opportunities, expansion into new markets, and improved advertising and product diversification.
Author: Nihad Ahmed, Economist