(Bloomberg) -- Colombia's manufacturing industry productionindex fell below the 50.0 growth threshold in January for thefirst time in 11 months. The overall manufacturing gauge dippedto 47, the lowest level in 18 months as Colombia's manufacturingsector came to a standstill.
“The results for the manufacturing sector in January were notgood. The five components of the PMI showed deterioration,although moderate. A lot of attention should be placed to whathappened with production which, after decelerating for fourmonths, had a negative and relatively high drop in January. Neworders and employment also showed reductions,” said AndrésLangebaek Rueda, Chief Economist Bolivar Group at Davivienda.
The five-point drop in the output index was the sharpest onrecord, which started in the spring of 2011. On a not seasonallyadjusted basis, the January index was the lowest in six years.Survey participants noted that the contraction is linked “toweak underlying demand and unsold stocks at clients.”
Lower output needs at Colombian goods producers resulted infurther job shedding -- the employment index fell for the thirdconsecutive month. Firms reportedly are not replacing voluntaryjob leavers.
On top of shedding jobs, “cutbacks to expenses were alsoevidenced by back-to-back declines in quantities of purchases.Furthermore, the decrease was the most marked in one year,”according to the report. “Anecdotal evidence highlighted cashflow difficulties and falling production as the key reasonsleading them to scale back input buying.”
Weak demand coupled with sufficient stock levels curtailed neworders, which fell to 47.2.
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
