Category Archives: Brazil PMI

6/1/16: BRIC Services PMIs: December

In recent posts, I covered Manufacturing sector PMIs for BRIC economies based on monthly data ( and Russian Manufacturing PMIs based on quarterly data (

The net outrun was that global manufacturing has ended 2015 an inch closer to zero growth / stagnation point and certainly nowhere near the levels of growth consistent with amplification in global economic growth rates forward. Most of this trend is down primarily to BRIC economies all of which have seen Manufacturing PMI falling below 50 marker for the first time since March 2009. As noted, this evidence strongly suggests overall continued downward pressures on growth in world’s largest emerging markets.

Now, consider Services PMIs.

Russian Services PMI data was covered in the earlier post here: on monthly basis and on quarterly basis here: The key takeaway from these was that the data strongly suggests that not only did the economy failed to attain stabilisation, but that growth might have turned more negative in 4Q 2015 in both services and manufacturing sectors.

China Services PMI eased to 50.2 in December, down from 51.2 in the previous month, statistically signalling zero growth in the Services sector. This marks the second-lowest index reading since the series began in November 2005 (behind July 2014). 4Q 2015 average reading stands at 51.1, which is weaker than 3Q reading of 51.9 and well below the 4Q 2014 reading of 53.1.

Per Markit release: “Relatively subdued client demand … was highlighted by only a marginal
increase in new work at service providers that was one of the weakest seen in the series history.”

India Services PMI unexpectedly hit a 10-month high at 53.6 in December up on November’s zero growth 50.1. Overall, Services PMI came in with a strong indication of positive expansion in output across the sector. This pushed 4q 2015 average to 52.3, ahead of 3Q 2015 average of 51.3 and above 51.2 average for 4Q 2014.

Per Markit: “Sub-sector data indicated that output rose in four of the six broad areas of the service economy, the exceptions being Hotels & Restaurants and Transport & Storage. The best performing categories in December were ‘Other Services’ and Financial Intermediation. Leading services activity to increase was a solid rise in incoming new work, one that was faster than
that seen in November. Anecdotal evidence highlighted strengthening demand conditions.” This puts Services dynamics at odds with Manufacturing which posted a significant contraction.

Brazil Services PMI tanked from already abysmal (albeit 8-mo high) 44.5 in November to 43.9 in December, with economy beating “deepening economic retreat”.

Per Markit: “Survey participants commented that worsening economic conditions led new business and activity to decrease. All six monitored subsectors posted lower activity in December, a trend that has been observed throughout the past eight months. The quickest rates of decline were seen in ‘Other Services’, Renting & Business Activities and Post & Telecommunication. Leading services activity to decrease was a further drop in incoming new work. Having accelerated since November, the pace of reduction was among the fastest in the survey history. Panellists indicated that a deepening economic downturn restricted clients’ confidence in committing to new projects.”

4Q 2015 average for Brazil Services PMI now stands at 44.0, up on 3Q 2015 reading of 41.9, but overall so poor, one can’t talk about any improvement at these levels of signalled contraction.

Summary of movements in PMIs for BRIC economies is provided in the table below:

Chart illustrates trends in Services:

I will be covering composite PMIs next, but overall Services PMIs conclusion is that a positive improvement in India was offset by deteriorating growth in China and outright fall-offs in activity in Russia and (much worse) in Brazil. Overall, the data from Services compounds the already rotten data from Manufacturing.

4/1/16: BRIC Manufacturing PMIs: December 2015 and 4Q 2015

BRIC Manufacturing PMIs posted another sector-wide weakening in growth conditions in December, ending 2015 on foot of an outright contraction across the sector in all BRIC economies for the first time since late 2013.

Russian manufacturing PMI posted a deterioration in sector performance in December, falling to 48.7 from 50.1 in November. This reverses two consecutive months of above 50 readings in October and November. On a quarterly basis, 4Q 2015 average reading was 49.7, which is better than 48.4 average for 3Q 2015, but still below 50.0 line. Overall December reading was the weakest since August 2015 and signals that the much anticipated stabilisation of the Russian economy did not take place in December. More detailed analysis of Russian PMIs is available here for monthly data and here for quarterly data. Overall, Russia was the third weakest PMI performer in Manufacturing sector terms within the BRIC group.

Brazil’s Manufacturing PMI remained deeply below 50.0 mark in December, although rising to 45.6 from 43.8 in November. December reading stands as the highest in 3 months, but still signals sharp rate of activity contraction. 4Q 2015 average is at 44.5, which is down on 46.7 average for 3Q 2015. Brazil has now posted Manufacturing PMI readings below 50.0 for 11 months in a row, the longest such record in the group of BRIC countries. In addition, Brazil remained the weakest performer in terms of Manufacturing PMIs in the BRIC group.

Per Markit: “Brazilian manufacturing companies reported worsening operating conditions at the end of 2015. December saw output and new orders dip at rates that, although slower, remained sharp…Amid evidence of cashflow problems, stocks of purchases and post-production inventories both decreased at rates that were the quickest in over six years. …severe downturn in the sector that was evident among the three monitored market groups: consumer, intermediate and investment goods. …December data pointed to a further decline in incoming new work, the eleventh in as many months. …Panellists indicated that a deeper economic retreat and falling purchasing power among consumers had led domestic demand to dwindle. Conversely, new orders from abroad rose. The weaker real had reportedly supported firms in securing new business from external clients. That said, the overall pace of expansion was only marginal.”

China Manufacturing PMI fell from 48.6 in November to 48.2 in October, marking 10th consecutive month of sub-50 readings and the weakest reading in 3 months. On a quarterly basis, 4Q 2015 reading was 48.4 which is somewhat better than 47.4 reading for 3Q 2015, although still signifying overall contraction in the sector. By all metrics, Chinese Manufacturing PMI came in second weakest in the BRIC grouping after Brazil.

Per Markit: “Operating conditions faced by Chinese goods producers continued to deteriorate in December. Production declined for the seventh time in the past eight months, driven in part by a further fall in total new work. Data suggested that client demand was weak both at home and abroad, with new export business falling for the first time in three months in December. As a result, manufacturers continued to trim their staff numbers and reduce their purchasing activity in line with lower production requirements. Meanwhile, deflationary pressures persisted, as highlighted by further marked declines in both input costs and selling prices.” Overall, this was the first time exports orders fell since September 2015.

India Manufacturing PMI posted a moderate drop from 50.3 in November to 49.1 in December, putting PMI reading below 50.0 line for the first time since June 2015. However, on a quarterly average basis, 4Q 2015 came in at 50.0, signalling zero growth in the sector over the last quarter of 2015, down from relatively robust growth posted in 3Q 2015 (with PMI averaging 52.1). PMI averaged 51.7 in 2Q 2015. The data confirms my previously expressed view that India is now skirting dangerously close to a manufacturing recession and that overall economic growth conditions in the economy have deteriorated significantly compared to 2014.

Per Markit: “Indian manufacturers saw business conditions deteriorate at the end of 2015. December’s incessant rainfall in Chennai impacted heavily on the sector, with falling new work leading companies to scale back output at the sharpest pace since February 2009. On the price front, inflation rates of both input costs and output charges were at seven month highs. …Consumer goods bucked the sub-sector trend and was the only category to see improving business conditions in December as production and new orders rose. Conversely, incoming new work and output fell in both the intermediate and investment goods market groups. Having risen for 25 straight months, total
manufacturing production in India fell during December. Furthermore, the rate of contraction was the sharpest in almost seven years.”

Summary table:

And a chart to illustrate

Hence, overall, as of December, 

  • Brazil manufacturing PMI continued to move along the general downward trend that started around 1Q 2013 and runs unabated since then, with Manufacturing recession setting in firmly from 2Q 2015 on. 
  • China, having displaced Russia for the second weakest position in the BRIC economies in terms of Manufacturing PMIs back in July 2015 remains the second weakest link in the BRIC group. Chinese manufacturing has been posting negative trend in PMIs since mid 2014, although in the last 3 months of 2015 this trend somewhat improved. 
  • Meanwhile, Russian Manufacturing is once again taking on water, having reverted down from a positive sub-trend that was present over May-November 2015.
  • Last, but not least, the bright star of India is now fading in terms of Manufacturing PMIs, with both trend (downward since December 2014 and more pronounced downward trend since July 2015) and absolute level of PMI reading signalling a risk of manufacturing sector recession in India. 

Overall, we now have all BRIC Manufacturing PMIs below 50 line for the first time since March 2009. This strongly shows overall continued downward pressures on growth in world’s largest emerging markets.

3/12/15: BRIC Composite PMIs: November

In two previous posts, I have covered November BRIC PMI (released by Markit):

Summary table of both here:

Now, consider Composite PMI readings:

Russian Composite PMI came in at 50.5 in November, which marks an improvement on 49.0 reading in October. Per Markit: “…the composite index for Russia returned to expansionary territory in November. At 50.5, up from 49.0, the latest reading was led by the manufacturing sector, which registered its strongest rate of growth in one year.” Composite employment activity contracted. Overall, the pattern since May 2015 has been for a one month of above 50 reading followed by a month of sub-50 reading. Thus, 3mo average through November is now at 50.2, while 3mo average through August is at 49.8. Both compare favourably to the 3mo average through November 2014 which stands at 49.2, but both 3mo averages are weak. In simple terms, Russian economy is bouncing along the bottom of the sub-cycle with no catalyst to the upside.

China Composite PMI came in at 50.5 in November, breaking three consecutive months of sub-50 readings, but posting, nonetheless an extremely weak expansionary reading. 3mo average is at 49.5 through November 2015, down on 50.5 3mo average through August 2015 and down on 51.7 3mo average reading through November 2014. All signs are of a major slowdown in the Chinese growth counting in November. Per Markit: “business activity in China increased for the first time in four months in November. That said, the rate of expansion was only marginal… The renewed increase in overall Chinese business activity was supported by a further rise in service sector activity in November. That said, the pace of expansion eased since October and was only modest. …Meanwhile, manufacturing production stabilised in November, following a six-month sequence of reduction. After a solid expansion in October, total new work placed at Chinese service providers rose only slightly in November. According to panellists, relatively weak market conditions had softened client demand in the latest survey period. Furthermore, September 2015 excepted, the latest increase in new work was the slowest seen in 16 months. In contrast, manufacturing firms saw a further decline in new business during November. Though modest, the decrease in new order volumes at manufacturers offset the increase at service providers, and led to a slight fall in composite new business.”

Indian Composite PMI fell sharply from 52.6 in October to 50.2 in November. On a 3mo average basis, reading through November 2015 is at 51.5 which is marginally better than 5.4 reading in 3mo through August 2015 and down on 51.7 reading in 3mo period through November 2014. Per Markit: “Posting a five-month low of 50.2 in November (October: 52.6), the seasonally adjusted Nikkei India Composite PMI Output Index was indicative of little-change in the level of private sector activity in India. Growth of manufacturing production softened to the slowest in the current 25-month sequence of expansion, while services activity broadly stagnated. …Indian services companies saw demand growth lose strength during November, leading to the slowest rise in incoming new work since July. …Order book volumes in the manufacturing economy increased for the twenty fifth straight month, although at the weakest pace in this sequence.”

Brazil’s Composite PMI remained deep into contraction territory at 44.5 in November, which is an improvement on an abysmal 42.7 reading in September and October 2015. On a 3 mo average basis, reading through November 2015 stands at 43.3, which is below the already weak 43.7 reading for the 3mo period through August 2015 and well below the 49.2 reading through November 2014. November 2015 marks 9th consecutive month of sub-50 readings in the series for Brazil making the Latin American economy the worst performer in the group of BRIC economies for the ninth month running. Per Markit: “Output, new orders and employment shrunk across the manufacturing and service sectors”, with downturn being more pronounced in manufacturing. Overall “weaker contraction in private sector activity” came on foot of “a softer reduction in services output, as manufacturing production dropped at the second fastest pace in 80 months.”

Charts to summarise the trends (note: charts use my own Composite BRIC index based on 100=zero growth line):

The above chart clearly shows that Russia is currently acting as a positive driver for BRIC Composite PMI dynamics. The core downside driver is Brazil.

Summary: per chart above, BRIC economies continued to exert negative pressure on global growth rates in November for the fourth consecutive month running. More importantly, BRIC economies posted growth conditions consistent with slower (than global ) growth since July 2014.  This scenario - of negative impact of BRIC growth on global growth conditions - is likely to remain in place in months to come as all BRIC economies continue to face downside risks to their growth rates.

3/12/15: BRIC Services PMI: November

BRIC Services PMIs are in for November, so let’s take a quick look at the headline numbers:

Russian Services PMI came in at 49.8 in November - a whisker away from 50.0 - and up on 47.8 in October. This marked second consecutive month of sub-50 readings in the series. 3mo average through November is at 49.6, which is weaker than the 3mo average through August 2015 (50.1) but stronger than the 3mo average through November 2014 (47.5). Per Markit: Service sector business activity declined only fractionally in November, although new business contracted for first time in eight months and outstanding business deteriorated further. “With backlogs of work falling, Russian service providers continued to shed jobs during November. Moreover, job cuts have been recorded in every survey period since March 2014. Panel members mentioned a contraction in employee numbers reflected efforts to cut excess capacity”.

Chinese Services PMI weakened in November to 51.2 from 52.0 in October, with 3mo average through November now at 51.2, down on 52.4 3mo average through August 2015 and on 53.1 average through November 2014. Given that Chinese Services PMI never registered sub-50 reading, current reading is consistent with statistically zero growth. Per Markit release, the index is now in a six=months long trend of falling PMI readings. “After a solid expansion in October, total new work placed at Chinese service providers rose only slightly in November. According to panellists, relatively weak market conditions had softened client demand in the latest survey period. Furthermore, September 2015 excepted, the latest increase in new work was the slowest seen in 16 months.”

Indian Services PMI posted a significant retrenchment from 53.2 in October to 50.1 in November, effectively signalling zero growth in the sector and falling to the lowest level in 5 months. 3mo average through November is at 51.5, well ahead of current month reading that matches exactly 3mo average through August 2015. 3mo average through November 2014 stood at 51.4. Per Markit: “Sub-sector data indicated that output growth in the Financial Intermediation, Post & Telecommunication, Renting & Business Activities and ‘Other Services’ categories was offset by declines at Transport & Storage and Hotels & Restaurants firms. In fact, the latter recorded a sharper rate of reduction. Indian services companies saw demand growth lose strength during November, leading to the slowest rise in incoming new work since July. Survey members blamed fierce competition and frail economic conditions for the slowdown in growth of new work.”

Brazil remains the weakest link in the BRIC group in terms of economic activity, with country Services PMI rising to 45.5 in November from 43.0 in October, still signalling sharp contraction in the sector, and marking ninth consecutive month of sub-50 readings. On a 3mo average basis, 3mo average through November was 43.4, which is an improvement on 3mo average through August 2015 (41.3) but down on 3mo average through November 2014 (49.3). Per Markit: “Sub-sector data highlighted a broad-based recession, with output, new business and employment falling across all six monitored categories. Leading services activity to decrease was a further drop in incoming new work, the ninth in as many months. Despite being the softest since August, the rate of reduction was sharp. Evidence from survey participants indicated that demand had been suppressed by the country’s fragile economic situation.”

Summary: Overall, therefore, BRIC services sectors have been performing poorly in November 2015, with no upside to growth form the sector in any economy. Brazil is the weakest performer in the group, with Russia being second weakest. India’s growth momentum of July-October 2015 is now exhausted, while China showing downward trend in Services growth since July 2015.

Next up: Composite PMIs and analysis

6/11/15: BRIC Composite PMIs for October: Some Sunny Spells Amidst a Downpour

Having covered 

now, let’s take a look at Composite PMIs

India’s composite PMI rose from 51.5 in September to 52.6 in October, indicating stronger growth in private sector activity across the country and the joint-fastest pace of growth since March 2015. Per Markit: “The latest improvement was driven by services, as goods producers saw growth of production wane.” 3mo average though October 2015 stood at 52.2, signalling faster growth in the 3mo average through July (50;9) and an increase in there ate of growth compared to 3mo period through October 2014 (51.2). This marks fourth consecutive month of above 50 reading for India and also a fourth consecutive month of India leading BRIC group in growth terms.

China Composite PMI signalled some early signs of stabilisation of Chinese business activity in October, posting reading of 49.9, up from September’s 80-month low of 48.0. Nonetheless, the index reading in October was the third lowest since May 2014. On a 3mo average basis, 3mo reading through October 2015 was at poor 48.9, down on 50.9 for the 3mo period through July 2015 and down on 51.9 3mo average through October 2014. October marked a third month in a row of negative growth across the Chinese economy, although relative position of Chinese economy in BRIC rankings did improve from being second worst in July-September to third worst in October.

Russian Composite PMI posted a very disappointing reading of 49.0 in October, down from 50.9 in September. On a 3mo average basis. Russian Composite PMI fell from 50.1 reading for the 3mo average through July 2015 to 49.7 for the 3mo period through October. 3mo average through October 2014 was 50.0. Per Markit release: “The Russian service sector returned to contraction territory at the start of the fourth quarter of 2015 as new work stagnated and excess capacity persisted. …In contrast, manufacturing output rose for a second successive month and to the highest degree since
last November. However, growth was insufficient to prevent the composite index slipping to a seven month low of 49.0 (from 50.9 in September).” Thus, in October, Russia moved to the position of second weakest growth in the BRIC group.

Brazil’s Composite PMI remained unchanged at 42.7 in October, staying below 50.0 reading threshold for the eighth month running, “highlighting the longest sequence of continuous decline in Brazilian private sector output since the global financial crisis. Sharp rates of contraction were noted in both the manufacturing and service sectors. …the latest reduction in employee headcounts was the most pronounced since composite data were first available (March 2007).” 3mo average through October stood at abysmally poor 43.4, which is marginally worse than 43.5 3mo average through July 2015 and significantly below the recessionary reading of 49.5 recorded over the 3 months through October 2014.

As chart above indicates, overall Composite Activity Index for BRIC economies as a whole continued to take water with both trend and current reading well below 100.0 marker of zero growth.

Brazil continues to lead BRIC group into recessionary territory in terms of aggregate growth, with Russia now ranked as second lowest growth momentum economy. On a simple average basis, BRIC Services PMI came in at around 49.0 with Manufacturing coming at 48.3, suggesting that overall growth conditions remain weak across the world’s leading EMs.