Colombia: PMI continues to lose ground in October
November 1, 2018
Colombia’s manufacturing sector continued to weaken in October, with the seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI) falling to 52.0 from 52.8 in September. The index, thus, moved closer to the critical 50-point threshold that separates expansion from contraction of the sector, denoting a slower pace of expansion in manufacturing activity. While October’s print marked the eighth consecutive month of expansion, it was the weakest in five months.
New orders continued to rise on sustained healthy demand, which in turn kept output growing at a solid pace. Both lost pace, however, rising at the slowest pace in five months amid shortages of raw materials, stiff competition and unfavorable weather conditions. Backlogs of work increased accordingly, although their pace of growth eased from September. Input prices continued to climb due to higher prices for chemicals, metals, plastics, rubber and textiles. While more workers were hired to deal with the higher workloads, the rate of staff in-take fell to a nine-month low. Firms raised their output prices to pass the burden of cost-adjustment onto consumers. Although, the rise in average output charges was slim given the offsetting impact from declining prices for some food items. Sentiment among manufactures remained upbeat, albeit slightly less optimistic than the previous month, thanks to expectations of buoyant economic conditions.
Colombia Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists expect fixed investment to expand 4.1% in 2019, which is down 0.1 percentage points from last month’s forecast. For 2020, panelists expect growth in fixed investment to accelerate to 3.8%.
Author: Nihad Ahmed, Economist