Category Archives: Manufacturing PMI

5/4/21: BRIC’s Manufacturing PMIs: 1Q 2021


Given a lot of noise about economic re-opening and abatement of the late 2020 wave of the pandemic, we expected BRIC countries PMIs to improve significantly in 1Q 2021 compared to 4Q 2020. Alas, the opposite took place:

  • Brazil Manufacturing PMI fell from 64.1 in 4Q 2020 to 55.9 in 1Q 2021. All three months of 1Q 2021 came in sub-60 (all three months of 4Q 2020 were above 60) and March 2021 was the lowest monthly reading since June 2020.
  • Russia Manufacturing PMI slipped from 51.5 in February to 51.1 in March. On quarterly basis, Russia Manufacturing PMI actually managed to rise from a recessionary reading of 47.6 in 4Q 2020 to a weak recovery reading of 51.2 in 1Q 2021. This is the highest reading since 1Q 2019 and the first above-50 reading since the end of 2Q 2019. Russia was the only BRIC economy posting increasing PMI in Manufacturing sector in 1Q 2021, and at that, the improvement went to anaemic growth from pretty steep contraction.
  • China Manufacturing PMI disappointed, falling from 53.8 in 4Q 2020 to 51.0 in 1Q 2021. Given structural importance of Chinese manufacturing globally, this implies a further build up in orders backlogs in the global supply chains, signaling more inflationary pressures down the line. On a monthly basis, March 2021 posted fourth consecutive decline in monthly PMIs, with March reading of just 50.6 - statistically, basically indistinguishable from zero growth conditions in the sector.
  • India Manufacturing PMI fell from 57.7 and 57.5 in January and February 2021 to 55.4 in March 2021, marking the slowest monthly rate of growth since August 2020. On a quarterly basis, India Manufacturing PMI fell from a hard-to-believe rate of expansion of 57.2 in 4Q 2020 to still robust growth of 56.9 in 1Q 2021.
Brazil and India were the two BRIC economies that managed to outperform global manufacturing sector growth in 1Q 2021 which came in at 54.1, up on 53.5 in 4Q 2020.

Global GDP-weighted BRIC group Index of Manufacturing Activity that I calculate based on Markit data fell from from 54.8 in 4Q 2020 to 52.8 in 1Q 2021, reaching the lowest reading since 2Q 2020 when it was at 45.0. Whilst BRIC group Index of Manufacturing Activity outperformed Global Manufacturing PMI in every quarter between 1Q 2019 and 4Q 2020, it fell below the global measure in 1Q 2021.

4/1/21: BRIC: Manufacturing PMIs 4Q 2020

Latest data for BRIC Manufacturing PMIs indicates three countries outperforming global rate of recovery in manufacturing sector, against one country (Russia) remaining in contraction territory and well below global growth mark.

On a quarterly basis,

  • Brazil's Manufacturing PMI stood at 64.1 in 4Q 2020, up on 62.6 in 3Q 2020, marking the second highest and the highest reading on record. The contraction in 2Q 2020 (with PMI at 42.0) was sharp, but not as sharp as in 1Q 2009. By these comparatives, GFC-related contraction of 2008-2009 resulted in 4 quarters average reading of 45.1 and saw three consecutive sub-50 readings. The Covid-19 related contraction was stretched only across one quarter, with 4 quarters average of 54.8 in 2020. It is, genuinely, hard to reconcile these numbers with reality of the Covid-19 crisis.
  • Russia Manufacturing PMI slipped to 47.6 in 4Q 2020 from 49.5 in 3Q 2020, marking sixth consecutive quarter of sub-50 readings. Statistically, Russian Manufacturing posted no growth (> 50 readings) in seven consecutive quarters. Over 2020 as a whole, Russian PMIs averaged abysmal 46.0, compared to the GFC and the Great Recession average of 2008-2009 of 44.7.
  • India Manufacturing PMI was at 57.2 in 4Q 2020, up on 51.6 in 3Q 2020, and averaging 49.5 for the year as a whole. During the GFC and the Great Recession period, India's PMI averaged at 51.1. Unlike Brazil, India is yet to recover to pre-Covid-19 levels of activity.
  • China Manufacturing PMI finished 2020 with a reading of 53.9, averaging 51.1 over 2020 as a whole, with overall PMIs performance suggesting that Chinese industrial producers have recovered from the Covid-19 pandemic by the end of 2020. China's Covid-19 experience has been more benign than the country contraction during the GFC and the Great Recession (46.9 average).
Global Manufacturing PMI stood at 53.5 in 4Q 2020 and an average of 49.3 over 2020 as a whole, against BRIC's Manufacturing Index (weighted by relative global GDP shares of the four economies) at 54.9 in 4Q 2020 and 50.5 for 2020 as a whole. In other words, BRICs have supported global growth to the upside during the Covid-19 pandemic. 

3/11/20: BRIC: Manufacturing PMIs October

 BRIC's manufacturing PMIs are out for October, marking the start of Q4 2020. Overall, the results reinforce Q3 2020 trends highlighted here:

  • Brazil posted further acceleration in the recovery momentum with Manufacturing PMI rising to 66.7 from 3Q 2020 62.6. 3Q 2020 was the historical record quarter for Brazil's Manufacturing PMI readings. Brazil's Manufacturing PMIs have now strengthened every month since May 2020, the last month of sub-50 readings.
  • In contrast to Brazil, Russia Manufacturing PMI slipped again in October, hitting a 5-months low at 46.9, down from 48.9 in September and well below already poor 49.5 reading for 3Q 2020. Prior to 4Q 2020, Russia clocked five consecutive quarters of Manufacturing PMIs below 50.0 mark.
  • China Manufacturing PMI rose from 53.0 in 3Q 2020 to 53.6 in October. China's latest reading is on-trend, with rising PMIs for the third quarter in a row. 
  • India Manufacturing PMI stood at 51.6 in 3Q 2020 and this improved to 58.9 in October, marking a major acceleration in growth conditions. 
  • Three of the BRIC economies have posted October Manufacturing PMI readings more robust than Global PMI reading of 53.0. Thus, overall BRIC Manufacturing activity index stood at 55.2 in October, well ahead of 53.0 reading for 3Q 2020. The last time BRIC Manufacturing activity index was below that of the Global Manufacturing PMI was 4Q 2018.
  • Russia was the only BRIC economy to continue posting recessionary PMI reading in its manufacturing sector. 

14/10/20: BRIC: Manufacturing PMIs Q3 results


BRIC - Brazil, Russia, India and China - economies have posted a significant improvement in Q3 Purchasing Managers Indices in Manufacturing sector:

Brazil Manufacturing PMI rose to 62.6 - the highest on record in 3Q 2020 following 42.0 recessionary reading in 2Q 2020. This is a massive rebound from pandemic lows, and the level of 3Q reading puts into question validity or accuracy of the surveys. On a monthly basis, the index was at 64.7 and 64.9 in August and September. Brazil's manufacturing index was at sub-50 readings in March-May 2020, with a reasonably credible rebound in June and July. August and September readings are literally out of the ball park, both in terms of historical comparatives and in terms of past turning points from recessions to expansions. 

Russia Manufacturing PMI treaded water in 3Q 2020, swinging from 48.4 in July to 51.1 in August and back to 48.9 in September. As the result, Russia posted sub-50 reading for 3Q 2020 at 49.5, the only BRIC economy in this position. This marks 5th consecutive quarter of sub-50 PMIs. Statistically,  the last time Russian manufacturing was in the expansion territory was in 1Q 2019. 

India Manufacturing PMI rose strongly in Q3 2020 to 51.6, well above 35.1 recession trough in Q2 2020. However, statistically, current reading signals relatively weak recovery. September monthly index came in at more robust 56.8, suggesting that the economy may be gathering some momentum and recovery may be accelerating. 

China Manufacturing PMI was basically unchanged at 53.0 in September compared with 53.1 in August. 3Q 2020 PMI is at 53.0, which is an improvement on statistically zero growth reading of 50.4 in 2Q 2020. China's Manufacturing PMI numbers are historically less volatile, so 53.0 marks the fastest pace of expansion since 4Q 2010.

Overall, GDP-weighted BRIC Manufacturing Activity Index stood at 53.0 in 3Q 2020, above the Global Manufacturing Index (51.6) and up on 45.0 in 2Q 2020.

3/10/20: BRIC: Manufacturing PMIs Q3 2020


Based on July-September data, here are the main takeaways from the BRIC Manufacturing Sector PMIs for 3Q 2020:

  • Brazil Manufacturing PMIs gained serious speed in 3Q 2020 compared to 2Q 2020, rising from a recessionary reading of 42.0 in April-June to signal rapid recovery at 62.6 over the last three months through September. This marks the highest quarterly reading on record for the country Manufacturing sector. Dynamically, growth accelerated in every month since the start of the sector recovery in June 2020.
  • Russia Manufacturing PMI came in at a disappointing and contractionary 49.5 in 3Q 2020, marking the fifth consecutive quarter of sub-50 readings, although still an improvement on the pandemic period low of 39.0 set in 2Q 2020. Adding pressure to the already poor performance, monthly PMI reading slumped from a relatively weak recovery signalled by PMI at 51.1 in August to a recessionary reading of 48.9 in September. 
  • India Manufacturing PMI rose from 52.0 in August to 56.8 in September, with 3Q 2020 reading at 51.6 - a substantial but likely incomplete recovery on the pandemic low of 35.1 set in 2Q 2020.
  • China Manufacturing PMI rose from 2Q 2020 reading of 50.4 to 3Q 2020 reading of 53.0, implying almost a full recovery in the manufacturing sector on 1Q 2020 pandemic period trough of 47.2. September marked a fifth consecutive month of PMI readings above 50.0. 
Overall, BRIC weighted Manufacturing Activity Index (based on monthly PMIs) stood at 53.0 in 3Q 2020, up on 45.0 in 2Q 2020 and 49.1 in 1Q 2020. Current reading signals the fastest q/q growth in the sector since 1Q 2011. The ongoing recovery across the BRIC economies is faster than Global Manufacturing PMI recovery (at 51.6), albeit highly uneven and somewhat suspicious. The core driver for this growth is Brazil, where manufacturing data dynamics is completely out of touch with services data dynamics and looks extremely unreliable.