Category Archives: China Services PMI

7/1/20: BRIC Services PMIs 4Q 2019


BRIC Services PMIs have been a mixed bag in 4Q 2019, beating overall Global Services PMI, but showing similar weaknesses and renewed volatility.

Brazil Services PMI slipped  in 4Q 2019, falling from 51.8 in 3Q 2019 to 51.0. Statistically, this level of activity is consistent with zero growth conditions. In the last four quarters, Brazil's services sector activity ranged between a high of 52.3 and a low of 48.6, showing lack of sustained growth momentum in the sector.

Russia Services sector posted a surprising, and contrary to Manufacturing, robust rise from 52.0 in 3Q 2019 to 54.8 in 4Q 2019, reaching the highest level in three quarters. Statistically, the index has been in an expansion territory in every quarter starting with 2Q 2016. 4Q 2019 almost tied for the highest reading in 2019 overall, with 1Q 2019 marginally higher at 54.9. For 2019 overall, Services PMI averaged 53.3, which is below 2018 average of 54.6 with the difference being statistically significant.

China Services PMI ended 4Q 2019 at 52.4 quarter average, up on 51.7 in 3Q 2019. Nonetheless, 4Q 2019 reading was the second weakest in 8 consecutive quarters. The level of 4Q 2019 activity, however, was statistically above the 50.0 zero growth line. In 2019, China Services PMI averaged 52.5 - a slight deterioration on 53.1 average for 2018, signalling slower growth in the sector last year compared to 2018.

India Services PMI averaged 51.7 in 4Q 2019, statistically identical to 51.6 in 3Q 2019. Over the last 4 quarters, the index averaged 51.5, which is effectively identical to 51.6 average for 2018 as a whole. Both readings are barely above the statistical upper bound for 50.0 line, suggesting weak growth conditions, overall.


As the chart above indicates, BRIC Services PMI - based on global GDP weightings for BRIC countries - was indistinguishable from the Global Services PMI. Both averaged 52.2 in 2019, with BRIC services index slipping from 52.6 in 2018 and Global services index falling from 53.8 in 2018. On a quarterly basis, BRIC services PMI averaged 52.3 in 4Q 2019, compared to 51.7 in 3Q 2019 - both statistically significantly above 50.0; for Global Services PMI, comparable figures were 52.0 in 3Q and 51.6 in 4Q 2019, again showing statistically significant growth.

11/9/16: BRIC PMIs: Services & Manufacturing – August


With full 3Q 2016 update on PMIs coming up relatively soon, and having not done monthly updates on the time series for some time now, here is a quick summary of BRIC Manufacturing and Services PMIs through August 2016:


On Manufacturing side:

  • Brazil remains firmly stuck under 50.0 and the talk about improvements in the economy is highly premature. The rate of contraction did slow down a bit in recent months, but getting worse more slowly is not equivalent to getting better. With 19 consecutive months of sub-50 readings, the manufacturing side of Brazil's economy remains deeply sick. Last time Brazil's manufacturing posted statistically significant growth was in March 2013. Ouch!
  • Russia has been posting volatile manufacturing PMIs headlines for some time now. August reversion of PMI to 50.8 - statistically indistinguishable from 50.0 - offers no change to this pattern. That said, Russian Manufacturing appears to be stable, as opposed to contracting. Last 3mo average is at 50.6 - which, statistically, signals zero growth. This compares somewhat positively against 48.6 3mo average through May 2016. Overall, Russian manufacturing has not posted statistically significant growth reading - based on PMIs - since December 2014, with exception of one month (June 2016).
  • China's Manufacturing PMI posted a non-contractionary reading of 50.0 (zero growth) in August, down from 50.6 in July. In statistical terms, Chines manufacturing posted contraction or zero growth readings for 25 consecutive months now.
  • India continued to post significantly positive growth in manufacturing, based on PMIs. Over the last 8 months index reading stayed above 50.0 (statistically above 50.0 in 4 months out of 8). Current expansionary period in Indian manufacturing is now 8 months long and strengthening.
Chart below summarises trends in Manufacturing PMIs


The above shows that Manufacturing sectors are converging toward growth recovery in Russia and China, while India remains well-ahead of the rest of BRIC economies in terms of positive growth momentum. Brazil is on a clear downward trend and has decoupled from the other BRICs.

Services sectors:


As the above illustrates:

  • Brazil services sectors posted yet another month of declining growth, with rate of decline accelerating in August compared to July. This marks 18th consecutive month of negative growth in the services sector in the country. As with manufacturing, country services have been performing extremely poorly since March 2013, when structural (long-term trend) slowdown in growth kicked in.
  • Russia services sectors posted 7th consecutive month of above 50.0 readings, signalling relatively strong (albeit slower than in July) recovery. Over the last 6 months, Russia posted statistically significant growth in 5 months, which is rather solid sector recovery compared to the same period of 2015.
  • Chinese services sectors never posted a reading below 50.0 in the entire history of the time series. However, in August, the series reading of 52.1 was stronger the July reading and marked the third time the series were statistically above 50.0 over the last 6 months. This suggests some firming up in the services sector growth in China - a welcome relief to the rather pessimistic outlook projected by the PMIs in previous months.
  • India services PMI rose strongly to statistically significant reading of 54.7 in August, marking 14th straight month of above 50.0 readings (in level terms). August was the third month out of the last 6 months with statistically significant growth reading.

Just as with manufacturing, BRIC services sectors posted continuous improvements in trading conditions in India, China and Russia over the recent months. Brazil, however, remains significant drag on BRIC growth with no signs of convergence to the rest of the BRIC economies in sight.

Overall: both Manufacturing and Services PMIs suggest that BRIC economies as a group continue to act as a moderating factor on global growth trends. Although no longer dragging the global economy into growth recession, the block of largest emerging markets economies is not exactly propelling world growth to higher trend levels. However, more analysis on this later, with Composite indicators.

3/3/16: BRIC Composite Activity – February


On a cumulative basis (based on Composite PMIs for each country), the BRIC economies as a group have posted a very disappointing performance in February 2016.

Note: for this index, 100.0 is a zero growth marker.

Russian economy Composite Indicator posted a positive upside surprise, rising from a contractionary reading of 96.8 in January to a weakly-expansionary reading of 101.2. 3mo average through February 2016, however, remains below 100 line at 97.9, which is weaker than the 3mo average through November 2015 at 100.3. The details of Russian Manufacturing sector woes are covered here: http://trueeconomics.blogspot.com/2016/03/2316-bric-manufacturing-pmi-february.html, while details of Russian Services and Composite PMIs upside are covered here: http://trueeconomics.blogspot.com/2016/03/3316-russia-services-composite-pmi.html.

As a result, Russian economy acted as a factor pushing up BRIC rates of growth in February:



In contrast with Russia, Chinese Composite Indicator posted a significant contraction in February, falling from 100.2 (zero growth) in January 2016 to 98.8 (weak contraction) in February. On a 3mo average basis, the index is now at 99.3 for the period through February 2016, up marginally on 98.9 reading for the 3months through November 2015, but down on 102.4 reading for the 3mo average through February 2015. Details of Chinese Manufacturing PMIs are covered here: http://trueeconomics.blogspot.com/2016/03/2316-bric-manufacturing-pmi-february.html, while details of Services and Composite PMIs are covered here: http://trueeconomics.blogspot.com/2016/03/3316-china-services-composite-pmi.html.


India’s Composite Indicator fell from 106.6 in January to 102.4 in February, signalling major slowdown in the rate of economic expansion. 3mo average through February 2016 is at 104.1, reflecting robust growth in January, and up on 102.9 3mo average through November 2015, but below 105.3 reading for the 3 months period through February 2015. The weakness in the Indian economic growth is highlighted by comparison to the historical average, which stands at 109.5.

Per Markit: “February data showed that services firms and goods producers alike registered weaker increases in activity. …Falling to a three-month low of 51.4 in February, from 54.3 in January, the seasonally adjusted Nikkei Services Business Activity Index highlighted a softer expansion of output that was only marginal. Where growth was seen, businesses reported higher levels of incoming new work. Although new orders at services firms continued to rise in February, the rate of expansion eased to the weakest since last November as firms reportedly faced strong competition for new work during the month. A quicker increase in order book volumes in the manufacturing economy was insufficient to prevent growth of private sector new orders from easing to a three-month low.”

Conditions in Indian Manufacturing are covered in detail here: http://trueeconomics.blogspot.com/2016/03/2316-bric-manufacturing-pmi-february.html.


Meanwhile, Brazil remained the sickest economy in the BRIC group. Composite Indicator for Brazilian economy sunk to an all-time low of 78.0 from an already recessionary 90.2 in January. As the result, 3mo average for Brazil’s Composite Indicator was at 85.3, down on already extremely weak 86.6 recorded over the 3 months through November 2015 and on 100.1 3mo average through February 2015.

According to Markit: “The downturn in the Brazilian economy took a noticeable turn for the worse in February. Business activity, new orders and employment all fell at, or near to, the fastest rates since the combined manufacturing and service survey began in March 2007. Companies continued to link the adverse operating environment to the ongoing economic, financial and political crises. …Accelerated downturns were registered at manufacturers and service providers alike, although the slump at services companies was especially severe. At 36.9 in February, down from 44.4 in January, the seasonally adjusted Markit Services Business Activity Index posted its lowest reading in the nine-year survey history. Business activity has fallen in each of the past 12 months.”

Brazil’s Manufacturing PMIs were covered in detail here: http://trueeconomics.blogspot.com/2016/03/2316-bric-manufacturing-pmi-february.html.

The summary of changes in both manufacturing and Services sectors across all BRIC economies is here:


Thus, overall, global GDP-weighted BRIC PMI Indicator (computed by me) fell to 98.4 - signalling moderate or mild contraction, down from January reading of 100.6. The Index is now registering sub-100 readings in seven out of nine last months. Worse, BRIC economies last posted a statistically significant reading for growth back in December 2014. On a 3mo basis, 3 months average through February 2016 is at 99.1, which is basically unchanged on 3mo average through November 2015 (99.0) and significantly lower than the 3mo average through January 2015 (101.8). Starting with February 2015, the index has been averaging zero growth.


3/2/16: BRIC Services PMIs for January: Some Rays of Hope


In the previous two posts, I covered



Now, let’s take a look at the Services PMIs for all BRIC economies, followed by a post on their Composite PMIs.


Russian Services PMI for January 2016 came in with a hugely disappointing reading of 47.1 from already poor 47.8 recorded in December. On a 3mo average basis, the index is now at 48.2, worse than already poor 49.4 average for the 3 months through October 2015, although, as expected - well above the abysmal 44.7 average for the 3mo period through January 2015. The Services sector has now posted sub-50 PMI readings in 4 consecutive months, with deteriorating readings in 3 consecutive months, signalling no respite to the Services sector contraction.


China Services PMI came in at a surprising uplift in January, reaching 52.4 - the highest reading since August 2015, and up on 50.2 in December. This move was surprising since Chinese services PMI has been deteriorating every month from October 2015. As a reminder, the downturn in the manufacturing sector hit Chinese Manufacturing PMI hard with index falling to a 3-mo low in January and staying below 50.0 line of zero growth for 11 months in a row.


Brazil Services PMI remained the weakest of all BRIC economies at 44.4 in January up on a truly abysmal 43.5 in December. 3mo average for Brazil Services PMI was at 44.5, which is somewhat better than 43.2 average for the 3mo period through October 2015, but worse than 48.7 3mo average through January 2015. Brazil’s Services PMIs have now been below 50 line for 11 months in a row.

According to Markit: “Current downturn longer than 08-09 crisis… Activity decreased in all six monitored categories, with the quickest contraction seen at Renting & Business Activities. Leading services output to fall was another decline in incoming new work. Inflows of new business dipped at a softer pace, but one that remained sharp.” As in the case with Russian economy, inflationary pressures, primarily driven by currency devaluations, have created adverse headwinds for Services sector firms in Brazil. “January data pointed to a build-up of inflationary pressures in Brazil’s service economy. A weaker currency (particularly against the US dollar) combined with higher utility bills had reportedly resulted in an overall increase in cost burdens. The rate of inflation climbed to a three-month high and was well above the long-run series trend. As a consequence, service providers raised their average tariffs again, and at the fastest pace since October.”

Brazil’s economy not only continuing to contract, but remains the weakest of all BRIC economies, in Services sector terms since April 2015.


India Services PMI posted an impressive rise from already rather robust 53.6 in December to 54.3 in January 2016. The 3mo average has reached 52.7 in the period through January 2016, which is stronger than 52.1 recorded for the period through October 2015 and ahead of 52.0 3mo average through January 2015. Overall, this was the highest Services PMI reading for India since January 2013 and marks second consecutive month of PMIs acceleration. With this, Indian economy clearly has shaken off some of the downward momentum on growth that was building up in May-September 2015 and again roared it’s head in November 2015.

Per Markit: “Posting a 19-month high… Services Business Activity Index pointed to a marked and accelerated expansion of activity across the sector. Growth was noted in four of the six monitored categories, the exceptions being Hotels & Restaurants and Transport & Storage. Underpinning the overall increase in services output was a seventh successive monthly expansion of new business inflows. Having accelerated to the joint-fastest since June 2014, the growth rate was marked. Anecdotal evidence highlighted strengthening underlying demand and improved weather conditions.”

Overall, January marks the second month of India’s Services PMI leading other BRIC economies to the upside.

Chart and summary table to illustrate:



2/2/16: China Services & Composite PMIs for January: No Signs of Roaring Growth


China Services PMI came in at a surprising uplift in January, reaching 52.4 - the highest reading since August 2015, and up on 50.2 in December. This move was surprising since Chinese services PMI has been deteriorating every month from October 2015.

Per Markit: services “providers had a strong start to 2016, with business activity increasing at the fastest rate in six months. …According to panellists, improved inflows of new business underpinned the latest expansion of services activity.”

As a reminder, the downturn in the manufacturing sector hit Chinese Manufacturing PMI hard with index falling to a 3-mo low in January and staying below 50.0 line of zero growth for 11 months in a row. Details of Manufacturing PMI dynamics are covered in-depth here: http://trueeconomics.blogspot.com/2016/02/1216-bric-manufacturing-pmi-january.html.

On a 3mo moving average basis, China Services PMI stood at 51.3 in January 2016, exactly the same as for the 3mo period through October 2015 and down on 52.7 reading for the 3mo average through January 2015. It is worth noting that the index never dipped below 50.0 in its entire history and the historical average for the index is at 55.1. Current reading is statistically significantly below the historical average.



Due to substantial improvement in the Services PMI, China’s Composite PMI signalled stabilisation in overall economy-wide Chinese business activity in January, with Composite Output Index registering fractionally above the no-change 50.0 value at 50.1, up from 49.4 in December. However, overall, Composite PMI of China has been above 50.0 in only two of the last 6 months and on both occasions, index readings were not statistically distinguishable from 50.0.

Still, 3mo average through January for Composite PMI stood at 50.0 (zero growth) against 48.9 average through October 2015 and 51.3 average through January 2015. In other words, the economy, judging by Composite PMI might be closer to stabilising, but growth is not exactly roaring back.