Category Archives: BRIC Business Outlook

4/8/20: BRIC: Manufacturing PMIs


BRIC Manufacturing PMIs are out for July and the numbers are bizarre:



Brazil is going parabolic? The country is absolutely devastated by COVID19, although the Government is hell-bent on Malthusian 'let them mind their own health or die' tactic. And its Manufacturing PMI came in at a world-leading 58.2 in July, up on weak growth-signalling 51.6 in June. This is the highest monthly reading on record for Brazil. It is such an outlier, in terms of historical record, in terms of recent pre-COVID19 trends and in terms of international comparatives, one is wondering if the data was compiled by someone with some serious fever.

On the mid-range of surprises, China's Manufacturing PMI came in at 52.8 in July compared to 51.2 in June. This marks second month of statistically positive growth-supporting PMI. China's Manufacturing PMIs are generally rather subdued, so 52.8 is the highest the index has been since January 2011. The outrun is not surprising, however, given that China managed to 'officially' contain COVID19 pandemic earlier in 2Q 2020 and moved to reopen its economy. Unlike in the case of Brazil, China's Manufacturing PMIs have been consistent (dynamically) with its Services PMIs.

On the downside surprise, Russia Manufacturing PMI fell in July to 48.4 from 49.4 in June. The index has now been nominally below 50 mark since May 2019, although June reading was not statistically different from 50.0. Still, July reading clearly shows deteriorating conditions in Russian manufacturing sectors.

On an even bigger downside surprise, India Manufacturing PMI fell to 46.0 in July down from 47.2 in June, marking fourth consecutive month of sub-50 readings. India's reading in July was the third lowest for any month since January 2009.

Overall, GDP-weighted BRIC Manufacturing PMI - computed by me using Markit countries-level data - stands at 51.1 in July, and improvement on 45.0 reading recorded over 2Q 2020.

3/6/20: BRIC Services PMI: May 2020


Services PMIs for BRIC economies are out today, so we can updated 2Q figures to include data for May. The latest monthly print imply slight moderation in the economic contraction in Brazil, India and Russia, with return to Services sector growth in China. This marks the first month since end of January with China posting positive growth in Services (reading of PMI above 50).


Brazil Services PMI was statistically unchanged in May at 27.6, compared to April 27.4 reading. Last time the Brazilian Services sectors posted PMI reading consistent with no contraction (at 50.4 - statistically zero growth) was back in February 2020. Current running average PMI for 2Q 2020 is at 27.5, marking the lowest reading on record.

Russia Services PMI was up from an absolutely disastrous 12.2 reading in April to a somewhat less disastrous reading of 35.9 in May. The index has been at at 37.1 in March. 2Q index reading so far is at 24.1, an absolute historical low, marking the second quarter in a row of sub-50 indicator readings, consistent with sharp contraction.

China Services PMI was the only BRIC Services indicator that managed to reach above 50 in May. May index at 55.0 was consistent with a major recovery momentum compared to 44.4 recorded in April. At 49.7, however, the 2Q figure is still outside positive growth territory.

India Services PMI continued to show fundamental weaknesses in the economy. May Services PMI reading of 12.6 was an improvement on April reading of 5.4, but 2Q 2020 reading is currently at 9.0. 1Q 2020 Services activity reading was at 54.1, implying that Indian services activity has literally stopped on the dime in April-May 2020.

Overall, BRIC 2Q 2020 Services PMI is currently at 35.7, down from 1Q 2020 reading of 44.9. 2Q 2020 is currently the lowest quarterly PMI reading for BRIC in history.



I have covered BRIC Manufacturing PMIs for May 2020 here: https://trueeconomics.blogspot.com/2020/06/1620-3-months-of-covid19-impact-bric.html.

19/4/20: BRICs PMIs Q1 2020


Coronavirus early impact on the global economy is quite evident now through the BRIC economies PMIs that cover the first two months of the pandemic:




One country breaking the ranks so far on this is India, where the pandemic was registered only in mid-March, resulting in 'distancing' restrictions being imposed only in the second half of the last month of the 1Q. 

Even accounting for India's relatively lagged impact of the COVID19, BRIC quarterly PMIs (note: I use simple average for each country monthly PMIs and weigh these by each BRIC economy's respective share of the Global GDP, adjusted for differences in prices and exchange rates):
  • BRIC Composite Manufacturing PMI for 1Q 2020 came in at 49.1 - statistically significantly below 50.0, indicating a recession, and marking the weakest reading since 1Q 2009. Nonetheless, BRIC Manufacturing PMI was above the Global Manufacturing PMI of 48.4.
  • BRIC Composite Services PMI for 1Q 2020 was at 44.9, weakest on record, and below Global Services PMI of 45.6. BRIC reading for 1Q 2020 was consistent with a recession.
  • Global Composite PMI at 45.9 was the weakest on record and basically in-line with the BRIC's average of Manufacturing and Services PMIs. Brazil Composite PMI at 46.9 and Russia Composite PMI at 47.7 were recessionary, but better performing that the Global Composite PMI, while India's Composite PMI of 54.8 was completely out of alignment with the Global economy and the rest of the BRICs. China Composite PMI of 42.0 was weaker than the Global Composite PMI owing to the earlier start of the pandemic in China.

2/4/15: BRIC: Business Outlook 12 months ahead


Summary of BRIC economies Business Outlooks for 12 months ahead, via Markit:

India: "The Markit India Business Outlook survey points to sustained optimism among Indian companies. However, the net balance of +26 percent for overall output is the lowest in one year and below the both the BRIC and global averages. Weaker degrees of sentiment have been recorded across the manufacturing and service sectors, with the respective net balances registering +24 and +28 percent in February."


Russia (covered in more detail here: http://trueeconomics.blogspot.ie/2015/04/2415-russia-business-outlook-q1-2015.html): Overall private sector outlook forward has improved at the mid-point of Q1 2015 compared to the start of Q4 2014 as headline % of companies expecting an increase in next 12 months minus % expecting a decline has risen to +20% from Q4 2014 record low of +10%. The net balance for expected goods production over the next 12 months has risen to +35%, the highest since October 2013." We are seeing effects of imports substitution.


China: "…continued optimism at Chinese companies regarding future business activity". "February’s net balance of +30 percent is up from +26 percent in the autumn to the highest reading in a year. The latest reading is also above both the BRIC and global averages (+28 percent and +27 percent, respectively). …A net balance of +28 percent of goods producers anticipate an expansion of output over the coming year, up from +25 percent in October. Meanwhile, a net balance of +32 percent of service providers forecast business activity to increase in the next 12 months. This is the highest net balance seen in the service sector since mid-2012."

Brazil: "private sector companies remain optimistic towards output growth in the coming 12 months. However, the business activity net balance has slipped from +44 percent last October to +28 percent, its lowest reading since composite data were first available in October 2009. Sentiment has deteriorated at manufacturers and service providers."

As the chart below summarises, BRIC expectations are more subdued than those in the major advanced economies, with exception for Japan and the US.

Click on the chart to enlarge

Overall, this data shows consistent trend toward moderation in business expectations across the BRIC economies into Q1 2015, signalling growing downside risks to global growth. So far, ex-India (yet to be reported), Manufacturing data for March PMI surveys suggests this trend continuing through the end of Q1.