Economic slowdown consolidates: manufacturing growth negative for the fourth consecutive month
In June 2023, the production of the country’s manufacturing sector fell 4.8% with respect to the same month of the previous year, the employed personnel presented a drop of 0.9% and real sales decreased 5.3%, revealed DANE’s Monthly Manufacturing Survey with Territorial Focus (EMMET). The results suggest that the country is witnessing a slowdown in the economy, a diagnosis that could be confirmed today with the results of the GDP.
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Colombia’s economy slowdown: manufacturing remains in negative territory
The results of the manufacturing sector production reveal a decrease for four consecutive months, since in January 2023 the growth was 0.2% and in February 0.4. Since March, the red numbers reveal the month to month drop in the country’s real production.
In March 2023, compared to the same month of the previous year, the variation of the manufacturing sector production was -2%, in April -6.4%, in May -3.4% and in June -4.8%.
For the former Minister of Agriculture and Rural Development of Colombia, Andrés Valencia Pinzón, the results consolidate the deceleration of the economy, due to the negative growth in most sectors.
La producción industrial tuvo una variación anual a junio de -4.8%. La mayoría de sectores tuvieron crecimientos negativos. Las ventas cayeron 5.3% y el empleo 0.9%.
— Andrés Valencia (@AndrsValencia9) August 14, 2023
Se sigue consolidando la desaceleración económica. pic.twitter.com/kYoD5KjWR7
Of the 39 industrial activities observed in the survey, the real production of 31 activities registered negative variation in real production.
The subsectors that registered the greatest negative variation were: Basic industries of non-ferrous precious metals (-34.1%), Manufacture of other types of transportation equipment (-32.8%), Manufacture of motor vehicles and their engines (-31.3%), Transformation of wood and its products (-28.8%) and Manufacture of basic chemical substances and their products (-25.6%).
The slowdown in the economy can also be seen in the slight, or even nil, growth of the eight subsectors that did not reach negative territory. All of them added two percentage points to production.
The variation of Manufacture of machinery and equipment was 0.0%; Manufacture of other chemical products 0.3%; Processing and preservation of meat, fish, crustaceans and mollusks 3.4%; Manufacture of beverages 5.4%; Manufacture of soaps and detergents, perfumes and toilet preparations 7%; Coking, petroleum refining, and fuel blending 8.5%, and Manufacture of sugar and sugar cane 30%.
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Agricultural production also fell sharply
Regarding agricultural production, the slowdown of the economy is also present in the coffee sector, vegetable and animal fats, dairy products, among others.
Compared to June 2022, the index for the sixth month of 2023 shows a drop in the production of the agricultural sector. Coffee threshing recorded -14%; Processing of vegetable and animal oils and fats -11.8%; of other food products -10%, of dairy products -8.8%, prepared food for animals -5.5%, and Processing of cocoa, chocolate and confectionery products -2.5%.
The slowdown of the economy is consolidated with the results of the exports of the agricultural sector.
According to Valencia, to this decreasing panorama in manufacturing production is added the fall in exports of flowers, palm, banana and coffee. He also estimates a fall in the Gross Domestic Product (GDP).
La producción de café cayó por encima del 14% en el 2° trimestre y el precio también viene en descenso. Las exportaciones de flores, banano y cafe cayendo en valor y volumen. Palma también. El PIB agro del 2° trimestre no se ve muy bien. Es probable que caiga. Mañana sabremos.
— Andrés Valencia (@AndrsValencia9) August 15, 2023
About the DANE’s Monthly Manufacturing Survey with Territorial Focus
The EMMET is a statistical research of the National Administrative Department of Statistics (DANE), which provides data on the dynamics of the main economic variables of the Colombian manufacturing sector in the short term.
The EMMET evaluates the monthly transformation of the country’s manufacturing sector through the observation of variables such as production, sales, employment, wages and hours worked. These data are used by DANE to generate indexes, analysis of variations and contributions.
In addition, this Survey plays a fundamental role in the preparation of estimates corresponding to the industry’s Gross Domestic Product (GDP), a task developed by the Technical Directorate of Synthesis and National Accounts.
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