Colombia: Manufacturing PMI signals deterioration in August
The Davivienda Colombia Manufacturing Purchasing Managers’ Index (PMI) fell to 49.8 in August from 50.0 in July. As a result, the index moved below the 50.0 no-change threshold and signaled a deterioration in manufacturing-sector operating conditions compared to the previous month.
August’s reading reflected a sharper decline in new orders amid subdued demand conditions, public policy uncertainty and high stock levels at clients. As a result, firms reduced their workforce at the fastest rate in 21 months. That said, companies increased their input buying at a quicker rate and production rose despite the overall contraction in new business, reflecting healthier business sentiment: Expectations of demand growth from advertising, innovation and new product launches drove sentiment to a five-month high.
On the pricing front, input cost inflation accelerated to its fastest level since March 2023, driven by higher prices for foodstuffs, metals, plastics, transportation and wood; firms partially attributed these increases to unfavorable exchange rate movements. That said, intense competition and efforts to boost sales saw output charges rise only marginally, as companies were reluctant to pass increased costs onto consumers.