Colombia: PMI falls to four-month low in September
Colombia’s manufacturing sector lost ground again in September, with the seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI) falling to 52.8 from 53.3 in August. The index, thus, moved closer to the crucial 50-point threshold that separates expansion from contraction in manufacturing output, signifying a weaker pace of expansion.
While September’s print reflected a rise in order books and production, the drop in the headline figure from the previous month was driven by weaker growth in new orders and the slowest expansion in production in three months. That said, output grew at a marked pace, thanks to positive market conditions, stockpiling initiatives and the launch of new products. Given the strength of new business inflows, backlogs of work accumulated at the swiftest pace since April 2011. Firms hired workers at a more rapid rate in response to the higher workloads. On the price front, input prices rose on an upturn in the prices for chemicals, food, metals, packaging, paper, plastics, rubber and textiles, higher tax burdens, and weakening in the currency. Some manufacturing firms raised their output prices to pass the burden of cost adjustment onto clients, while others provided some discounts. Overall, output prices climbed. Sentiment remained upbeat, rising to the third strongest in the survey history.