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.