Colombia: PMI climbs to 30-month high in July
Colombia’s manufacturing sector gained speed at the outset of the third quarter, reflected by the seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI), which rose to 53.5 in July, up from 53.0 in June. July’s reading marked the highest print in two-and-a-half years; the index thus climbed further above the critical 50-point threshold that separates expansion from contraction in manufacturing output.
July’s reading was underpinned by a sharp upturn in new business, which fueled strong expansions in output and employment. Stronger demand and the launch of new products led to higher inflows of new business, which rose at the sharpest pace in three-and-a-half years. To deal with the rise in outstanding business, which accelerated at the fastest pace since January 2015, factories scaled up output and hired more workers. The increase in output was the most marked since January 2016, while the in-take of workers was at the highest rate since the end of 2015. On the price front, input price rose, with higher prices for chemicals, metals and plastics behind the upturn, which was partially offset by successful negotiations with vendors. The rate of inflation moderated, however. Business sentiment remained elevated, albeit at a three-month low. Concerns about low investment and the sustainability of the economic recovery dampened optimism.