Colombia: PMI shoots up to two-and-a-half year high in June
July 3, 2018
The seasonally-adjusted Davivienda manufacturing Purchasing Managers Index (PMI) climbed to 53.0 in June, up from 51.1 in May, which marks the highest result since January 2016. The index thus moved further above the critical 50-point threshold that separates expansion from contraction in manufacturing output.
June’s print reflected a strong improvement in business conditions in the manufacturing sector driven by the ongoing improvement in the domestic market. Order books grew at a faster pace, which encouraged firms to raise output. Meanwhile, the increase in new business was the most marked in 21 months and rose in tandem with outstanding contracts, product diversification and stronger demand. To meet the higher output requirements, firms hired additional workers with the job creation rate strengthening to a nearly two-and-a-half year high. On the price front, input prices continued accelerating and companies passed on some of the additional cost burden to clients by charging higher prices. Lastly, business confidence remained upbeat, with manufacturers optimistic that marketing efforts and the launch of new products would lead to higher demand from both domestic and overseas markets in the next 12 months.
Author: Nihad Ahmed, Economist