- Colombia: Imports grow in August, showing an encouraging outlook for domestic demand and the construction sector
On Monday, October 21st, DANE published import data for August 2024. Imports reached USD 5.53 trillion CIF, a level slightly lower than July 2024 (-0.9% m/m) but registering a growth of 4.6% compared to the same month of the previous year, maintaining the positive trend for the second consecutive month (chart 1). Imports of manufactured goods contributed the most to the annual variation, followed by the import of fuels, while the import of agricultural products contracted.
The growth in imports of durable and non-durable goods could mean a moderate recovery in domestic demand. Imports of consumption-related goods completed five months in positive territory, with an increase of 5% y/y in August, which may be associated with a recovery of domestic demand, also reflected in the recent data on economic activity in which the commercial sector registered a growth of 3.2% y/y in August. However, it is too early to anticipate that domestic demand has entered a sustained recovery since some imported items that stand out are associated with non-durable goods, such as pharmaceutical products and food products, while the import of durable goods is growing but at a lower rate.
On the positive side, the growth of imports of construction materials (+42.2% y/y) and capital goods for industry (+7.0% y/y) is also noteworthy, which encourages us to think that the secondary sector could be showing better dynamism in the coming months. Fuel imports showed an 8% y/y growth, which we associate with the recent measures around the electricity supply and the use of thermoelectric plants, which run on gas.
The trade balance widened in August due to a contraction in exports. The trade balance stood at USD 1.31 billion (chart 2), widening the deficit compared to August 2023 (USD 1.06 billion). In August, exports fell, mainly due to lower oil prices, which explains part of the widening trade deficit, as imports maintained their positive dynamics.
Key Highlights:
- Consumer imports completed five months in positive territory by growing 5.04% in August. Imports of non-durable consumer goods grew 5.6% y/y, contributing 8bps to the total variation in imports, while imports of durable consumer goods increased by 4.2% y/y, adding 4bps to the total, concentrated in pharmaceutical products, household appliances, and food. It is worth noting that the textile sector has not yet shown strong signs of recovery, with imports growing by a slight 0.8% y/y.
- Raw material imports show a mixed balance, growing by 3.83% y/y. In August, imports of intermediate goods and raw materials were positive in fuels (+4.39% y/y) and the industrial sector (+6.41% y/y), however, the agricultural sector registered a fall of -15.13% y/y. The performance of raw material imports in the industrial sector is highlighted, which gives positive signals about some activities in the sector, especially in the agricultural and pharmaceutical products sectors.
- The import of capital goods gives positive signals for the construction sector. Imports of capital goods increased by 5.77% y/y, with the import of construction materials growing the most (+42.2% y/y), which may be associated with a better dynamic in the construction of civil works. On the other hand, the import of capital goods for industry increased by 7.0% y/y, while the import of capital goods for the agricultural sector contracted by 9.45% y/y (chart 3).
—Jackeline Piraján & Daniela Silva
DISCLAIMER
This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
These reports are provided to you for informational purposes only. This report is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any financial instrument, nor shall this report be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The information contained in this report is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a “call to action” or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. Scotiabank may engage in transactions in a manner inconsistent with the views discussed this report and may have positions, or be in the process of acquiring or disposing of positions, referred to in this report.
Scotiabank, its affiliates and any of their respective officers, directors and employees may from time to time take positions in currencies, act as managers, co-managers or underwriters of a public offering or act as principals or agents, deal in, own or act as market makers or advisors, brokers or commercial and/or investment bankers in relation to securities or related derivatives. As a result of these actions, Scotiabank may receive remuneration. All Scotiabank products and services are subject to the terms of applicable agreements and local regulations. Officers, directors and employees of Scotiabank and its affiliates may serve as directors of corporations.
Any securities discussed in this report may not be suitable for all investors. Scotiabank recommends that investors independently evaluate any issuer and security discussed in this report, and consult with any advisors they deem necessary prior to making any investment.
This report and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced without the prior express written consent of Scotiabank.
™ Trademark of The Bank of Nova Scotia. Used under license, where applicable.
Scotiabank, together with “Global Banking and Markets”, is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including; Scotiabank Europe plc; Scotiabank (Ireland) Designated Activity Company; Scotiabank Inverlat S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Casa de Bolsa, S.A. de C.V., Grupo Financiero Scotiabank Inverlat, Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank group and authorized users of the Scotiabank mark. The Bank of Nova Scotia is incorporated in Canada with limited liability and is authorised and regulated by the Office of the Superintendent of Financial Institutions Canada. The Bank of Nova Scotia is authorized by the UK Prudential Regulation Authority and is subject to regulation by the UK Financial Conduct Authority and limited regulation by the UK Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the UK Prudential Regulation Authority are available from us on request. Scotiabank Europe plc is authorized by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority.
Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V, Grupo Financiero Scotiabank Inverlat, and Scotia Inverlat Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities.
Not all products and services are offered in all jurisdictions. Services described are available in jurisdictions where permitted by law.