Industrial production in Colombia fell an estimated 4.3% in January
over the same month last year, according to a private-sector survey of
industrialists released Tuesday.
Industrial sales in January fell 5.9% on the year dragged down by sales
of cars, the National Association of Industrialists, known as ANDI,
said.
According to ANDI, 16 of the 22 industrial sub-sectors
registered a decline in production, while 18 of 23 reported a fall in
sales in January.
Production of clothing registered the sharpest contraction in January, as it shrank 32%.
ANDI’s president, Luis Carlos Villegas, who recently said the
industrial sector entered into recession, added that the Colombian
economy has decelerated as a result of the global financial crisis but
noted Colombia may improve if the central bank keeps cutting interest
rates.
Since December, the Colombian central bank has cut rates by 2
percentage points to 8%. Analysts expect the monetary authority to
further slash rates by a median 0.75 percentage point on Friday to
7.25%, according to a Dow Jones Newswires survey.
As a result of the global financial meltdown, 34.4% of businessmen said
Colombia’s economic situation is bad, followed by a 36% who believed
it’s regular.
In January, factories were running at an average capacity of 72.8%
which is lower than the 79.1% reported in the same month last year and
lower than the historic average of 76.5%.
ANDI explains factories were running at lower installed capacity because of vacations in early January.
A total of 67% of businessmen said inventories are high as demand for their products have slowed down.
Businessmen were also less optimistic about the future. A total of 46%
of businessmen said their companies will improve in the future,
compared with a 68% who said the same in January 2008.
In addition, business owners expressed concerns about low demand and raw material costs.
Industrial production, excluding coffee procession, shrank 3.5% last year, while retail sales rose a scant 0.5%.
The country’s statistics department is expected to release retail sales and industrial production on Wednesday.
