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Colombia's industrial sector has shown its resilience in the face of a turbulent macroeconomic environment, registering a solid performance in 1H2016 by taking advantages of unique opportunities.
The industrial sector in Colombia was the engine of the national economy during 1H2016 despite the many challenges that it faced. Although exports could be expected to rise after the Colombian peso lost about 35% of its value in the last 12 months, the reverse has taken place; total Colombian exports decreased by 20% YoY in May 2016. According to data from the National Department of Statistics (DANE), in May alone oil exports plummeted by 45.2%, while coal fell 39.1%, and even coffee dropped by 22.7%. Through the first five months of 2016, exports registered a sharp year-over-year decline of 27.9%, representing a loss of $11.5 billion for Latin America's fourth largest economy. Meanwhile, the Colombian economy grew by 2.5% overall in 1Q2016, a better than expected performance compared to other countries in the region; the output of Brazil's economy shrunk by 0.3%, while that of Chile advanced by 2% and Argentina grew by 0.5%. Despite the blows suffered due to falling commodity prices, good performances by the manufacturing, construction, and finance sectors all helped Colombia outperform its neighbors.
The manufacturing industry was the largest contributor to the country's GDP as it advanced 5.3% in May. The strong manufacturing performance was triggered by astonishing growth in 16 of its 24 sub-sectors.
Downstream oil-related activities increased by 20.6% thanks to the construction of a new refinery in Cartagena, while the beverage segment grew by 16.4%. As many goods and raw materials have to be purchased abroad, the loss in purchasing power of the peso made those products more expensive, hurting local firms. Nevertheless, there are certain companies that have benefited from the peso's depreciation and are even increasing their exports. In the textile industry, a sector that was protected by the peso devaluation against imports, domestic sales have increased dramatically.
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TABLE OF CONTENTS
Interview
Bruce Mac Master, President, National Business Association of Colombia (ANDI)
TBY talks to Bruce Mac Master, President of the National Business Association of Colombia (ANDI), on tackling obstacles to competitiveness in the economy, participating in the global value chain, and the impact of the currency devaluation.
read articleFocus: Bank Expansion Abroad
Fortune Favors the Brave
Colombian banks have greatly expanded their operations in Central America in the last decade. The dramatic growth of the middle class and the internationalization of the Colombian economy has propelled growth. The market has shaken the shackles of the large players who used to dominate the market, with smaller institutions expanding and widening their coverage across the region.
read articleInterview
Mauricio De La Mora Rodríguez, Former President, National Hydrocarbons Agency (ANH)
TBY talks to Mauricio De La Mora Rodríguez, Former President of National Hydrocarbons Agency (ANH), on promoting investment, gaining knowledge of offshore activities, and the short-term outlook.
read articleInterview
Eduardo Jaramillo Cuervo, President & CEO, General Electric (GE)
TBY talks to Eduardo Jaramillo Cuervo, President & CEO of General Electric (GE), on the role GE intends to play in developing Colombia's energy value chain and creating a diversified matrix to support the country's energy needs for years to come.
read articleInterview
Adriana Lucia Falla, General Manager, SoftManagement S.A
TBY talks to Adriana Lucia Falla, General Manager of SoftManagement S.A., on the important elements of the company's business, its key strengths compared to its competitors, and the significance of the IT sector in Colombia.
read articleInterview
Juan Martin Caicedo Ferrer, Executive President , Colombian Chamber of Infrastructure (CCI)
TBY talks to Juan Martin Caicedo Ferrer, Executive President of the Colombian Chamber of Infrastructure (CCI), on the future of infrastructure in the country, challenges, and the role of SMEs.
read articleFocus: 4G Generation
Motoring Toward Development
Colombia is looking toward the future and improving its transportation network by renewing road infrastructure, putting an end to the nation's underdevelopment in roads and highways. The government estimates that in the next four years the 4G program will dramatically enhance the Colombian economy, shortening traveling time between cities and, consequently, reducing transportation costs.
read articleFocus: Coffee
Morning Joe
Colombian coffee has an incredible reputation for its aroma, taste, and purity, which is why it is considered one of the best quality coffees in the world. This belief has not changed despite the entrance of huge producing countries such as Ethiopia, Brazil, and Vietnam into the market.
read articleReview: Education
Gold Star For You
In recent decades, Colombia made changes to nearly every level and aspect of its education system and has been exceeding the expected results, putting the country on the right track to achieve the president's goal of becoming the best educated country in the region.
read articleReview: Tourism
It's Not Magic
A reputation for violence had for many years stunted the growth of Colombia's tourism sector. But now that the country has enormously improved its image abroad, there is little to prevent it from becoming one of the most ideal destinations in Latin America.
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