Category Archives: BRIC PMI

6/4/15: BRIC Services PMIs & Overall Activity in Q1 2015


BRIC Services PMIs (published by Markit) are finally out, with the last two countries instalments today, so time to look at the Q1 2015 data. And from the top level view, things are not encouraging:

  • Brazil Services PMI slipped from 52.3 in February (a 14-months high that was a huge upside surprise) to a 70-months low of 47.9 in March - a massive fall. On a quarterly basis, things are not as bad, but that is all down to February reading. 3mo average for Q1 is at 49.5 - still contractionary/zero growth, compared to 49.3 Q4 1024 average and against weak growth recorded in Q1 2014 (50.5 average). In last 8 months, Brazil managed to post only two months of Services PMIs above 50, with only one month reading being statistically significantly above 50.0. In short, we now have a sign of deepening slowdown in the economy, based on both Manufacturing and Services surveys.
  • Russia Services PMI was predictably weak at 46.1 in March, although a gain on totally abysmal 41.3 reading in February. 3mo average through Q1 2015 is at 43.8 and this is well below already contractionary 47.1 average through Q4 2-14. Q1 2014 registered a weak contraction/static growth of 49.6. March reading was the strongest in 5 months, but overall Services side of the Russian economy has posted below 50 survey readings continuously over 6 months now. This, coupled with another (4th monthly) below 50 reading in Manufacturing suggests that there is an ongoing significant recession in the economy and that this has accelerated in Q1 2015 compared to Q4 2014.
  • China Services PMI remained in relatively moderate growth territory in March (at 52.3 against 52.0 in February) and 3mo average for Q1 2015 is at 52.0, weaker than Q4 2014 average of 53.2, but up on Q1 2014 average of 51.2. China never posted below 50 PMI in Services before , so we are left tracking relative weaknesses in positive growth signals here. Weak improvement in Services survey is offset, in China's case, by strong deterioration in Manufacturing index which fell below 50 in March.
  • India Services PMI was somewhat weaker in March 2015 at 53.0 compared to February 53.9 reading. Still, this marks the second highest reading in 9 months. India's Services PMI average for Q1 2015 is at 53.1 - a major improvement on 51.3 average through Q4 2014 and a big gain y/y - in Q1 2014, Services PMI was averaging only 48.2. March marked 11th month of above 50 readings for Indian Services surveys. India is the only BRIC country that managed to post m/m growth (above 50 readings) across both sectors: Manufacturing and Services.


Chart below shows Services surveys dynamics:



Table below summarises changes in Manufacturing and Services PMIs:


Pooling together Services and Manufacturing surveys data, chart below shows the overall BRIC trend in growth. March came in with a slowdown of overall economic activity across the block of the largest emerging markets economies and this slowdown took place in the already weak growth environment. While the series remain on an upward trend established from the local low attained in July 2013, this trend is no longer convincing and since June 2014, there has been a pronounced downward sub-trend. This does not bode well for the global economy.


4/3/15: BRIC Services PMIs: Stronger Growth and Russia Divergence


I covered BRIC Manufacturing PMI earlier this week: http://trueeconomics.blogspot.ie/2015/03/2315-bric-manufacturing-pmi-february.html

Now, let's take a look at the Services sectors performance.

  • Russia Services PMI are covered in detail here: http://trueeconomics.blogspot.ie/2015/03/4315-russian-services-and-composite.html
  • Brazil Services PMI came in at a surprising 52.3, breaking four months streak of sub-50 readings and rising strongly up on 48.4 in January. 3mo average through February 2015 is at 49.9 against the 3mo average through November 2014 at 49.3. An improvement on 3mo basis, but down on year ago 3mo average through February 2014 (50.7).
  • China Services PMI came in at 52.0, a slight improvement on relatively weak performance in January (51.8). 3mo average through February is at 52.4 against 3mo average through November 2014 at 53.4 and against 3mo average through February 2014 at 50.9. There is very little of anything spectacular in Chinese data so far.
  • India Services PMI came in at 53.9 a rise on 52.4 in January 2015. On 3mo average basis, current average through February 2015 is at 52.5 against previous 3mo average through November 2014 at 51.2 and against 3mo average through February 2014 at 47.9. 

Summary: Services PMIs have deteriorated over the last five months in Russia and deteriorated very sharply, signalling massive contraction in the Services sectors in the economy, mostly concentrated on financial services. Meanwhile, Services PMIs posted strengthening is India (surprise reversal of downward momentum over October 2014 - January 2015 period). China still showing some weaknesses, but positive growth in the sector, while India is clearly on a rebound with PMIs increasing over the last 3 months and now standing at the highest level since June 2014.



As the above clearly shows, Russia is a major point of divergence for Services sectors within the BRIC economies. This is not new, but the divergence is getting sharper and sharper. We are not yet at 2009 rates and levels of decline, but we are getting there.

Composite BRICs PMIs will be covered in the next post.

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.

8/2/15: BRIC Services PMIs: Poor Performance in January


BRIC PMIs for January are continuing to show divergence in growth across the four economies. I have covered manufacturing sector trends here: http://trueeconomics.blogspot.ie/2015/02/8215-bric-manufacturing-pmis-one-cold.html.

Now, let's take a look at Services PMIs:





  • Brazil Services PMI fell to 48.4 in January from 49.1 in December signalling deeper contraction and marking fourth consecutive month of sub-50 readings. Current 3mo average is at 48.7 and this compares poorly to the already contractionary 49.7 3mo average through October 2014. January 2014 3mo average was 51.2. 
  • Russian Services PMI dropped significantly from already poor reading of 45.8 in December to strongly contractionary 43.9 in January. 3mo average through January 2015 is at 44.7 and this compares unfavourably to 3mo average through October 2014 at 49.5. We now have 4 consecutive months of sub-50 readings in the series. 3mo average through January 2014 was 52.2. Overall, substantial decline in Services activity as signalled by the PMI reading.
  • China Services PMI stayed declined from 53.4 in December 2014 to 51.8 in January 2015. This is the weakest performance since July 2014. 3mo average through January is at 52.7, virtually unchanged on 52.6 average 3 mo reading through October 2014 and an improvement on 51.4 3mo average through January 2014.
  • India Services PMI improved from 51.1 in December to 52.4 in January, with 3mo average through January reading at 52.0 - ahead of 3mo average through October 2014 (51.1), and ahead of 3mo average through January 2014 (47.4).
  • Overall, Russia (-1.9 points), China (-1.3 points) and Brazil (-0.7 points) posted declines in Services PMIs in January compared to December 2014, while India (+1.3 points) posted an increase. 
  • Conclusion: BRIC Services sectors are still suffering from weak growth conditions, similar to those observed in December, with Russia being the weakest, followed by Brazil, and with very weak and weakening growth in China, set against improving growth in India.
Chart and summary table below:



8/2/15: BRIC Manufacturing PMIs: one cold January for growth


BRIC PMIs for January are continuing to show divergence in growth dynamics across the four economies, across the two key sectors, and a broad slowdown in growth across majority of the BRIC parameters. Here are some details:

Starting with Manufacturing PMIs:

  • Brazil Manufacturing PMI improved marginally to 50.7 from 50.2 in December. Current 3mo average is at 49.9 and this compares as a weak improvement on 49.4 3mo average through October 2014. January 2014 3mo average was 50.3. Across the board - weak growth returned to Brazil's manufacturing, but both m/m and 3mo on 3mo growth improvements were poor.
  • Russian Manufacturing PMI dropped significantly from already contractionary 48.9 in December to strongly contractionary 47.6 in January. 3mo average through January 2015 is at 49.4 and this compares unfavourably to 3mo average through October 2014 at 50.7. However, 3mo average through January 2014 was even worse - at 48.7. Overall, substantial decline in Manufacturing activity as signalled by the PMI reading and second consecutive month of sub-50 readings.
  • China Manufacturing PMI stayed virtually flat at 49.7 in January as compared to 49.6 in December. 3mo average through January is at 49.8, down on 50.6 3mo average reading through October 2014 and on 50.3 3mo average through January 2014. Just as in the case of Russia, Chinese Manufacturing activity posted second consecutive month of sub-50 readings.
  • India Manufacturing PMI slipped from 54.5 in December to 52.9 in January, with 3mo average through January still reading at 53.6 - ahead of 3mo average through October 2014 (52.0), and ahead of 3mo average through January 2014 (51.1).
  • Overall, India (-1.6 points), and Russia (-1.3 points) posted declines in Manufacturing PMIs in January compared to December 2014, while Brazil (+0.5 points) and China (+0.1 points) posted increases. Declines outstripped increases by a wide margin and two economies (China and Russia) posted sub-50 readings. 
  • Conclusion: BRIC manufacturing sectors are still suffering from weak growth conditions, with Russia being the weakest, followed by China, and with very anaemic growth in Brazil and slowing growth in India.
Chart and summary table below:



Services PMIs covered in the next post.