Category Archives: BRIC economies

2/3/15: BRIC Manufacturing PMI: February Marks Slowdown in Growth

BRIC Manufacturing PMIs (individual countries data published by Markit) have posted some renewed weakness in February compared to January.

  • Russian Manufacturing PMIs are covered here:
  • Brazil Manufacturing PMI came in at 49.6 - signifying shallow contraction, down from 50.7 in January. 3 mo average through February is at 50.2 (barely signalling any growth), which is an improvement on 3mo average through November 2014 (49.3) but is weaker than 3mo average through February 2014 (50.5). 
  • China Manufacturing PMI is at 50.7, an improvement on January's 49.7 and breaking previous two-months streak of sub-50 readings. 3mo average is at 50.0, which is weaker than 50,2 3mo average through November 2014, but an improvement on 3mo average through February 2014 (49.5)
  • India Manufacturing PMI slipped to 51.2 in February from 52.9 in January, with 3mo average through February at 52.9, which is stronger than 3mo average through November 2014 (52.1) and 3mo average through February 2014 (51.6).
Table below and chart summarise the trends:

8/2/2015: Composite Activity Signals Weakening of Growth in BRIC

Having covered Manufacturing PMIs and Services PMIs for BRIC economies, let's take a look at the Composite measure of PMIs.

First, combined Composite Measure for all BRIC economies. The measure is based on a sum of Services and Manufacturing PMIs for each country, weighted by the relative size of each economy (as a share of the global GDP, based on IMF data).

As the chart above shows, Composite measure of PMI-captured activity has fallen for the BRIC group from 102.3 in December 2014 to 101.1 in January 2015. 3mo average through January stood at 101.9 against 102.5 in 3mo period through October 2014 and 100.8 in 3 months through January 2014. Since July 2013, the recovery in BRIC PMIs was weak and volatile, with downward trend setting in from June 2014.

Next, consider disaggregated PMIs for Russia as opposed to BRIC-ex-Russia:

The chart above shows the divergence between Russian PMIs and those of the rest of the BRIC group. This divergence set in in October 2013, well before the start of the Ukrainian crisis in December 2013-January 2014. Nonetheless, even removing Russia out of the equation, BRIC PMIs have slipped in January 2015 compared to December 2014.

Conclusions: Overall trends in BRIC PMIs show weakening of the economic activity in January 2015 compared to December 2014. This weakening does not remove the positive trend established following April 2014 local low in the series, but it does suggest that the recovery trend in PMIs is likely to be much weaker this time around than post September 2011 local low. Meanwhile, Russia is continuing to diverge from the BRIC trend and is showing significant deterioration in activity in January, consistent with expectations of major economic growth pressures in Q1-Q2 2015.