BRIC PMIs for June are out and with them we have 2Q 2019 figures. And the story they tell is two-fold:
- Fold 1: There is an ongoing Global-scale slowdown in the economy that is broad, sharp and testing the waters of a mild recession approaching
- Fold 2: The BRICs are barely providing any upside support to the Global momentum.
This is simply the 'Uglier' side of the ugly. Global Manufacturing PMI hit 49.8 in 2Q 2019 - statistically, zero growth level, nominally - a manufacturing recession ward, albeit a very shallow one. More ominously, we now 6 consecutive quarters into declining growth reading. Now, per BRICS: Brazil at 50.9 (holding somewhat just above the water line, but down from 53.0 in 1Q 2019); Russia is at 50.1 - basically zero growth and down from 51.3 in 1Q 2019; India is at 52.2, down from 53.6 in 1Q 2019, and China is at 49.9, having delivered four quarters of statistically zero growth readings. So BRIC GDP shares-weighted Manufacturing PMI is at 50.6, which means the overall Manufacturing sector is barely staying afloat on the choppy growth seas. In 1Q 2019 the same was 51.0 and the 2q 2019 reading is at the lowest level since 3Q 2016.
Services sector posted Global PMI at 52.1. Which sounds like 'growth, but is hardly impressive. 2Q 2019 was the weakest since 4Q 2016, and marks the fourth quarter of shrinking PMI readings.
BRICs: Why, they are barely staying above the Global trend. Brazil is in a statistical Services recession at 48.6 in 2Q 2019, the worst reading in 3 consecutive quarters; Russia posted Services PMI of 51.4 in 2Q 2019 - seemingly respectable, but the lowest reading since 4Q 2015; China Services PMI is at 53.1, basically unchanged on 53.0 in 1Q 2019 (about the only 'british' spot); and India is at 50.3, the lowest for any quarter since 1Q 2018.
All of which means that the Composite activity index reading is a bit of debacle:
Overall, Global Composite PMI fell to 51.5 in 1Q 2019, the lowest reading since 2Q 2016. Dynamics are also bad: Global Composite PMI has now declined every quarter since its local peak of 54.2 in 1Q 2018. And the BRICs are in the same boat: Brazil Composite is at 49.3, the lowest reading in 3 quarters; Russia Composite at 51.2, the lowest in 13 quarters; India Composite at 51.4 is the slowest growth signal in seven quarters; and China is at 51.4 for the lowest reading in 8 quarters.
Not a pretty sight...