Manufacturing imports fell in May but the Colombian industrial sector did not rebound

During May 2023, imports into the country, especially manufactured goods, were reduced. However, this reduction does not show an increase in domestic manufacturing production to replace the products that were no longer imported.

In fact, the manufacturing factory had already been declining in the last period, between May 2022 and 2023 it fell 3.4%.

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The explanation for the drop in imports may be related to the recurring interest rate hikes that tend to cool the economy and constrain demand. In May 2022, the Bank of the Republic’s monetary policy rate was 6%; in the same month of 2023, the rate was 13.25%, an increase of 120%.

According to data published by the National Administrative Department of Statistics (DANE), in May 2023 imports in Colombia reached a value of USD $5,418.5 million CIF. This figure represents a 20.4% decrease compared to imports recorded in the same month of the previous year. This decrease was mainly due to a 17.8% decrease in the manufacturing group.

In May 2023, manufactured imports had a significant share of 72.6% in the total CIF value of all imports of the country. These manufactured imports are classified according to the Standard International Trade Classification (SITC) Revision 3 aggregation.

Below are the data published by DANE on the manufacturing groups and their contributions to the total decline in imports in May 2023:

Machinery and Transportation equipment constituted 46.8% of manufactured imports

This group had the largest weight within manufactured imports in May 2023, a month in which it experienced a decrease of 11.5% in its imports compared to the same month of the previous year.

Foreign purchases of this group fell from $2,083.2 million in May 2022 to $1,842.8 million in 2023. This reduction contributed a negative 5 percentage points to the total decline in manufacturing purchases.

The machinery and transportation equipment products that decreased the most were Apparatus and equipment for telecommunications, sound recording and reproducing, as well as Metal working machines and other transportation equipment.

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Chemicals and Allied Products accounted for 27.3% of manufactured imports

This group, which includes goods ranging from plastics to medicinal and pharmaceutical products, accounted for a considerable share of manufactured imports in May 2023, but experienced a significant decrease of 27.3% from the previous year.

This group contributed 8.2 percentage points to the total decline in manufactured imports, falling from $1,464.2 million in May 2022 to $1,073.4 million in the same month of 2023.

Among the products of the group that fell the most were fertilizers, organic chemical products and dyeing, tanning and coloring materials, among others.

Manufactured goods, classified by material, account for 16.4% of manufactured imports.

This group, to which products such as leather, rubber and mineral manufactures belong, recorded a 21.1% reduction compared to May 2022.

The group of manufactured articles, mainly classified according to material, contributed negatively with 8.2 percentage points to the fall in manufactured imports, decreasing from USD $818 million in May 2022 to USD $645.414 million in the same month of 2023.

The manufactured articles that declined the most were paper, paperboard and articles of paper pulp or paperboard, cork and wood manufactures, and rubber manufactures.

Miscellaneous manufactured articles (9.5% of manufactured imports)

This group, which includes prefabricated buildings, furniture and parts thereof, among others, accounted for a smaller share of manufactured imports, experienced a decrease of 11.1% in May 2023.

Imports of miscellaneous manufactured goods decreased from USD $419 million in May 2022 to USD $373 million in 2023. This decline contributed 1 percentage point to the decline in total manufactured goods.The miscellaneous manufactured articles that fell the most were clothing and clothing accessories, professional, scientific, and controlling instruments and appliances, and photographic and optical apparatus, equipment, and materials.

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