Colombia: PMI in August edges down from July's 30-month high
September 3, 2018
Colombia’s manufacturing lost some pace in August, with the seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI) edging down to 53.3 from July’s 30-month high of 53.5. The index, thus, moved slightly closer to the critical 50-point threshold that separates expansion from contraction in manufacturing output.
August’s reading reflected a sharp increase in output, which rose at the swiftest pace since January 2016, and a solid upturn in new business inflows. Improved demand, product diversification and marketing efforts supported an expansion in new business. Colombian manufacturers expect a continued rise in production, with business sentiment strengthening to the second-highest level since April 2012 on a brighter outlook on the wider economy. Greater production requirements, stemming from projects in the pipeline, prompted manufacturers to boost employment in August. Backlogs of work fell for the first time in three months aided by the ongoing in-take of workers, along with inventory-building efforts and increased availability of inputs. Firms faced higher input prices owing to a rise in the prices of aluminum, cellulose, chemicals, energy, food, paper, plastics, steel and textiles. Meanwhile, production expectations for the next twelve months rebounded in August.
Author: Nihad Ahmed, Economist