Colombia’s Business Divide: Retail Confidence Climbs as Industry Stalls

Fedesarrollo’s latest business confidence survey shows Colombia’s commercial sector gaining momentum as industry struggles. The March 2025 report highlights a sharp contrast between merchants’ optimism and industrial caution, reflecting a split economic recovery.

The Commercial Confidence Index jumped to 24.5% in February, up 2.9 points from January’s 21.6%. Merchants report a 5.8-point rise in current economic perceptions and a 2.4-point boost in six-month expectations.

Inventory levels dropped by 0.6 points, suggesting stronger sales or tighter stock management. Compared to February 2024’s 10.9%, commercial confidence soared by 13.6 points.

The three-month average reached 22.3%, a significant 8.3-point increase over last year. Meanwhile, the Industrial Confidence Index fell to 0.2% in February, down 1.8 points from January’s 2.0%.

Production expectations for the next quarter dropped by 3.8 points, inventories rose 1.2 points, and orders slipped 0.4 points. Still, the index edged up 0.5 points from February 2024’s -0.3%. The three-month average hit 0.7%, a 2.2-point gain over the previous year.

This divide mirrors Colombia’s broader economic story. Retailers benefit from rising consumer spending and a resilient retail sector. Commerce rebounds from early 2024 lows, driven by lower interest rates and higher real incomes.

Colombia’s Economy Shows Mixed Signals as Industry Lags

Industry, however, faces supply chain disruptions and weak demand, keeping confidence near neutral. Historical data shows commerce peaking at 41.5% in 2021, while industry bottomed out at -4.2% in 2023.

Macroeconomic forecasts support this mixed picture. Analysts expect Colombia’s GDP to grow by 2.5% in 2025, with consumption and investment as main drivers.

Inflation will ease, though some costs like housing and energy remain high. The current account deficit will widen as imports outpace exports, and foreign direct investment will cover the gap.

Fedesarrollo’s survey, a trusted measure since the 2000s, reveals merchants thriving while industry treads water. These trends shape investment and employment, offering a clear view of Colombia’s economic path in a shifting global landscape.