Colombia car factory
(Photo: Intereconomia)
Economy

Colombia’s manufacturing sector picked up in July: Govt

by Wesley Tomaselli

Colombia’s manufacturing sector picked up in July, according to government statistics published on Monday.

“The industrial sector increased 0.2% in July compared to the same month in 2012 when it increased by 2.9%,” read a statement published by Government Statistics agency DANE.

After what many analysts and business leaders considered a ‘bottoming-out’ of the sector throughout the first half of 2013, Colombia’s manufacturing showed an increase in productivity.

Growth in output increased by 10.7% in oil refining, 9.7% in food products and 98.5% in auto-body manufacturing, 9.5% in basic chemicals and 13.3% in other types of transportation made up 2.3% of the total annual variation, according to the DANE.

Low confidence

Though the manufacturing industry shows signs of a turn around, business leaders are still skeptical of Colombia’s climate for doing business.

In a survey of manufacturers conducted by the country’s National Association of Business Leaders, business leaders responded with a general consensus that Colombia’s industrial sector is “in a state of deterioration,” citing a long string of historically negative production figures and problems with demand.

MORE: Colombia manufacturing in a squeeze: survey

Peso

Colombia’s government has made it a priority to keep the exchange rate between the US dollar and the peso between 1,900 and 1,950 pesos to the dollar, a range Finance Minister Mauricio Cardenas has said is the target range of the Santos’ government.

Skeptics have worried that the strength of the peso means that Dutch Disease could set in and keep manufacturing from growing. Problems with keeping the peso competitive are only some of the worries manufacturers have.

Shrinking demand coupled with ailing transport networks are holding back what one manufacturer told Colombia Reports is a sector suffering from years of neglected infrastructure development.

The peso rallied to 1,891 pesos to the dollar on Monday after the US Fed announced it would not start tapering its purchases of $85 billion/day in assets.

Sources