Investment in the economy continues to fall, already accumulating five quarters of decline

One of the major constraints to the economy is lack of investment. According to data recorded by Dane, this feature, measured as gross capital formation, It fell by -13.4% in the first quarter of the year and is one of the worst fallers when analyzed on the spending side of GDP.

This setback at the start of the year has led to a cumulative five quarters of declines in gross capital formation, which shows the difficulties entrepreneurs face when investing. When analyzing the indicator by asset type, Machinery and equipment reflected a fall of -10.8%, reflecting a decline in industrial production.

Dane revealed earlier this week that real output in the manufacturing sector fell by 11.1% compared to the same month last year.. Meanwhile, actual sales fell 10.5% and employees employed fell 1.9%. Real manufacturing output has not fallen at this rate since August 2020It has declined by more than 10% due to the Covid-19 pandemic.

The other item that showed a decline in total capital formation was housing with a fall of -6.8%In line with the warnings raised by the sector due to a fall in some launches and property sales.

The segment saw 21 months of sales declines and 13 months of construction activity declines. Guillermo Herrera, president of the Colombian Chamber of Construction, said in Camacol last month, “This is the worst quarter of the housing sector in the last 15 years.”

Figures from the union showed the sector sold an average of 10,500 units per month, up from an average of 14,701 before 2020 and 19,208 during the pandemic.. In the first quarter of the year, 32,017 homes were sold, which was 6,900 fewer than during the same period in 2023.

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In March, home sales fell 34%; Social interest housing fell 38.2%, and non-VIS fell 23.5%. “We’re back to the market size we had ten years ago,” Herrera said.

Analyzing assets in total fixed capital formation the same panorama is reflected with a fall of -2.2%.

How much did the economy grow in the first quarter?

As Dane reports, first In the quarter of 2024, GDP in its original series grew by 0.7% compared to the same period in 2023.

The economic activities that contribute most to the dynamics of added value are: public administration and security; Compulsory social security schemes; education; Human health and social services activities grew by 5.3% (contributing 0.7 percentage points to the annual variation).

On the other hand, agriculture, livestock, hunting, forestry and fishing sector growing by 5.5% (contributing 0.5 percentage points to the annual variation). Regarding supply of electricity, gas, steam and air conditioning; water supply; Waste water disposal and treatment, waste management and environmental sanitation activities growing by 4.5% (contributing 0.2 percentage points to the annual variation).

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