Itaú BBA - COLOMBIA – Activity indicators upbeat in the 1Q19

Macro Latam

< Volver

COLOMBIA – Activity indicators upbeat in the 1Q19

mayo 14, 2019

Robust sector indicators and strong imports of capital goods are consistent with GDP growth of 3.4% in 1Q19.

Manufacturing and retail sales in the first quarter of the year remained solid pointing at a consolidation of the activity recovery. Robust sector indicators and strong imports of capital goods (hinting the investment rebound persisted in 1Q19) are consistent with GDP growth of 3.4% (NSA; 2.8% in 4Q18), to be released tomorrow.

In 1Q19, food and beverage sales led retail growth, but a sharp deceleration of auto sales led to a moderation of total sales. Retail sales increased 5.3% yoy in March (6.1% in February), close to both the Bloomberg market consensus and our forecast (5.5%). Overall, retail sales moderated to 4.8% in 1Q19 from 8.2% in 4Q18, hampered by auto sales slowing to 1.8% from 28.8% in 4Q18. Excluding vehicles sales, retail growth was broadly stable at 5.2%. At the margin, retail sales (excluding fuels and auto sales) accelerated to 11.5% qoq/saar in 1Q19, the fastest pace since 2Q18 (2.1% in 4Q18). Solid retail data comes amid a consumer confidence recovery at the close of the quarter (after a semester of pessimism), according to think-tank Fedesarrollo, boosted by more favorable views on current conditions as well as expectations.

Manufacturing completed five consecutive quarters of growth in 1Q19. The 3.2% increase in the month of March (2.9% previously) came in between our 2.6% expectation and the 3.5% Bloomberg market consensus. Chemical production was the driving force in March and in the quarter (alongside beverage production). Manufacturing rose 3.0% in 1Q19 (3.1% in 4Q19), as the growing drag from oil refining (-5.5% vs. +1.7% in 4Q18) was offset by improving chemical production. At the margin, manufacturing accelerated to 2.8% qoq/saar, from the 6.4% drop in 4Q18. 

The still expansionary monetary policy, low inflation (benefitting real wage growth) and improved private sentiment would drive the economic recovery this year. Nevertheless, sluggish global growth is a downside risk. We expect growth of 3.1% this year, from 2.7% for 2018.

 

Miguel Ricaurte
Carolina Monzón



< Volver