In the latest DANE results, real industrial production fell 2.2% compared to February 2023 and the number of jobs contracted 1.1%.
• With the February data, industry and commerce maintain their results in negative territory for a consecutive year, which confirms the process of deceleration of the economy.
• Regarding commercial dynamism, real retail sales showed a contraction of 1.8%. In terms of employment, employed personnel registered a negative variation of 0.4% when compared to the result of February 2023.
• With these results, the impact of two of the sectors with the greatest employment generation in the economy is confirmed, which compromises the dynamism of the labor market in the immediate future.
Recently, the National Administrative Department of Statistics (DANE) released the results of the industry and commerce indicators for the month of February 2024, which still show no signs of an economic reactivation in the short term. The effects of the contractionary policy by the Bank of the Republic are increasingly evident. The leading indicators show no signs of improvement and job creation remains in negative territory.
Industry
According to data reported in the Monthly Manufacturing Survey with Territorial Focus (Emmet), in February 2024, real production fell 2.2% compared to February 2023 and the number of jobs contracted 1.1%. With this result, so far this year there has been a drop in the industry’s real production of 3.2%. Finally, the variation of the aggregate of the last 12 months remains in negative territory (-2.7%) but continues its upward trend since November 2023.
In annual terms, of the 39 industrial activities represented, 30 registered negative variations in their real production, discounting 4.4pp to the total annual variation while 9 subsectors presented positive variations. The manufacture of motor vehicles (-3.0pp), the production of oils and fats of vegetable and animal origin (-3.0pp), the manufacture of non-metallic mineral products (-3.0pp) and the production of bakery products (-3.0pp) presented the main negative contributions to the annual variation.
Finally, when analyzing the territorial approach, it is observed that the main productive centers of the country showed negative annual variations. Indeed, the departments with the greatest negative contributions to the annual variation of real production in the manufacturing industry are: Antioquia (-0.8pp), Atlántico (-0.7pp), Bolívar (-0.6pp) and Caldas (- 0.3pp). Similarly, Barranquilla (-0.5pp), Cartagena (-0.3pp), and Manizales (-0.3pp) were the cities that contributed the most to the drop in real production when comparing February 2024 with the same month. of 2023.
Trade
Regarding the dynamics of commerce, according to the latest results presented by DANE, for February 2024, real retail sales presented a contraction of 1.8%. Observing the result of the 12-month variation, the sector’s slowdown process is ratified, with a negative variation of 7.0% in February 2024, maintaining the contractionary behavior observed since June 2023.
On the other hand, employed personnel registered a negative variation of 0.4% when compared to February 2023. This result corresponds to the decrease in direct jobs and those hired through companies. On a more optimistic note, both permanent staff and apprentices recorded increases, giving signs of greater formality and lower barriers to accessing the labor market.
Final considerations
In short, the leading indicators confirm the slowdown process that the Colombian economy has registered in recent months, in response to the contractionary policy of the Bank of the Republic. These results are worrying because these are strategic sectors for the economy due to their productive chains and their capacity to generate employment.
Key sectors for investment such as motor vehicle manufacturing remain strongly affected by weakening demand and their recovery seems distant. With the rate cut by the issuer, consumption is expected to have a new boost in the second half of 2024 and with that these sectors will become dynamic again. However, job creation remains a question mark, since the level of employment has been affected due to the poor economic dynamics and the loss of the growth bonanza in 2022 and 2023.