2/12/15: BRIC Manufacturing PMI: November

BRIC countries manufacturing PMIs are out via Markit, so here are the main insights:

• Russia: I covered Russian Manufacturing PMI earlier here, with a core conclusion as follows: In November, Russian Manufacturing posted a second monthly reading consistent with weak stabilisation, but virtually no signs of recovery. That said, Russian Manufacturing performance was second strongest in the BRIC group after India’s in November, which is consistent with all readings since July 2015.
• Brazil: In contrast to Russia, Brazil posted another massive deterioration in Manufacturing PMI, with index reading falling to an 80-months low of 43.8 from an already extremely poor reading of 44.1 in October. Overall, we now have 10 consecutive months of sub-50 readings and this dovetails with the latest GDP figures showing Brazil’s economy in a third consecutive quarter of recession at -1.7% in 3Q 2015. Per Markit: “PMI slides further, reaching 80-month low; Production contracts at steep rate amid sharp drop in new projects; Workforce numbers fall at quickest pace since April 2009.” Brazil is now the main laggard in the BRIC group in Manufacturing sector every month since March 2015. Dynamics-wise, things are getting worse: 3mo average through November is at 45.0, which is below 3mo average through August (46.5) and 3mo average through November 2014 (49.0).
• China manufacturing PMI remained below 50.0 mark for the 9th consecutive month in November, posting a reading of 48.6 - marginally better than 48.3 in October. 3mo average through November 2015 is at 48.0, which is marginally worse than 3mo average through August 2015 (48.2) and well below 50.2 3mo average reading through November 2014. Per Markit: “Chinese manufacturing firms signalled that output stabilised in November, thereby ending a six-month sequence of reduction. Meanwhile, total new work continued to decline, and at a similarly modest rate to that seen in October, despite a pick up in new export business growth. Relatively soft overall client demand led firms to scale back their purchasing activity again in November, while inventories also declined. Deflationary pressures intensified over the month, as highlighted by sharper decreases in both input costs and output prices.” China is currently the second weakest BRIC economy in Manufacturing terms every month running, since July 2015.
• India: Continuing to outperform other BRIC, India Manufacturing PMI has, nonetheless, posted a major deterioration in growth conditions in November, falling to 50.3 in November - a 25 months low - from 50.7 in October. 3mo average through November 2015 is at 50.7, below 3mo average through August (52.1) and below 3mo average through November 2014 (52.0).Per Markit: “The health of India’s manufacturing economy improved for the twenty-fifth successive month in November, although to the least extent in this sequence. The latest PMI data showed slower increases in incoming new business and output, while subdued demand growth led firms to keep workforce numbers broadly unchanged. Meanwhile, input cost inflation accelerated to the strongest since May, whereas factory gate prices were raised at a weaker rate that was marginal overall.” Given the historical levels of the series, 50.3 is not statistically distinguishable from 50.0, which implies that statistically, November reading (as well as October) was not consistent with above zero growth. 

Core outrun:

Overall, Manufacturing activity contracted in November across BRIC economies, signalling continued pressure on growth in world’s largest emerging markets. Forward indicators are also weak, with new orders pipeline and backlogs of work being depressed across majority of BRIC manufacturing sectors.

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

Having covered 

• BRIC Manufacturing PMIs for October here, and
• BRIC Services PMI here (),

now, let’s take a look at Composite PMIs

India:

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: 

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.

Russia:

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:

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. 

6/11/2015: BRIC Services PMIs: Continued Weakness in October

Having covered BRIC Manufacturing PMIs for October here, now, let’s take a look at Services PMIs

India:
Indian Services PMI rose to an eight-month high of 53.2 in October form September reading of 51.3. This marks fourth consecutive month of above 50.0 readings in the sector. 3mo average through October 2015 stood at 52.1, up on 49.4 3mo average reading though July 2015 and up on 50.7 3mo average through October 2014. Per Markit, “activity growth was noted in three of the six surveyed categories… Underpinning growth of services activity was a quicker increase in new business inflows. Incoming new work expanded at a solid pace that was the most pronounced since February.” In summary terms, Indian services performance improved in October, although growth rates singled remain below their historical average of 54.6.

China: 
China Services sector activity rose at a quicker rate in October (52.0) compared to September (50.5) and the fastest rate of expansion since July 2015. Per Markit, however, “…the latest reading was indicative of only a modest rate of growth that was slower than the historical average. Service sector companies saw a further rise in total new business during October. In line with the trend for activity, the rate of new order growth picked up from September’s recent low and was solid overall.” That said, 3mo average reading for the index through October stood at 51.3, which is lower than 3mo average reading of 53.0 for the period through July 2015 and is down on 53.5 3mo average through October 2014. Thus, overall, China’s Services sector has managed to turn around persistent declines in PMI readings over the previous 3 months, but activity levels in October stood well below historical average of 55.2.

Russia:
Russian Services PMI posted a disappointing sub-50 reading in October at 47.8 down from 51.3 in September, basically quashing the hopes of growth momentum reversal. 3mo average through October is now at 49.4, which is worse than 51.3 average for the 3mo period through July 2015 and is identical to the reading for the 3mo period through October 2014. Per Markit release: “Latest data marked the third time in the past five months that a sub-50.0 reading has been recorded, and October’s index level was also the lowest seen since March.” This contrasts the latest reading for Manufacturing PMI that posted an improvement rising to 50.2 in October. However, with Services in a clear contraction territory and Manufacturing statistically indistinguishable from zero growth, the Composite PMI for Russia posted sub-50 reading as well. Again, per Markit: “With the exception of the Communications sector, all services sub-categories recorded a decline in activity during the month. Sub-par performance was linked to a challenging economic environment which had a negative impact on sales, which stagnated at the aggregate service sector level in October. This thereby ended a six-month sequence of new business growth, and there were some reports that the sourcing of capital funds remained tough (although in terms of sector performance Communications was again a notable outlier,
registering a strong increase in new work).”


Brazil:
Brazil Services PMI posted another abysmally poor reading in October at 43.0, up on horrific reading back in September. On a 3mo average basis, 3mo average through October 2015 stood at 43.2, above 40.5 3mo average through July 2015, but down 49.5 recorded for the 3mo period through October 2014. This marks 8th consecutive month of sub-50 readings for the country Services sector and 9th consecutive month of sub-50 readings in Manufacturing activity. Per Markit release: “Panel member reports highlighted frail economic conditions across the country. Incoming new work received by Brazilian service providers continued to decrease in October. Furthermore, the rate of contraction was steep as highlighted by the respective index sliding to a 79-month low.”

Table below summarises main changes:

Chart below shows developing trends:

As shown above, Brazil continues to lead BRIC group into recessionary territory in the Services sectors, with latest moderation in the rate of contraction not sufficient to compensate for activity declines over the period from march 2015 on. Back in Aril 2015, Brazil pushed past Russia as the driver to the BRIC group downside and it remains in this ‘leading’ position. Another disappointing signal came from Russia, where Services PMI singled renewed and relatively sharp pressures to the downside. This single is consistent with the view of the Russian economy as being well outside the bounds of the recovery momentum. In contrast, both India and China posted improvements in the rates of growth in October in the Services sector, although Chinese data is clearly subject to serious questions about its quality.

Overall, however, on a simple average basis, BRIC Services PMI cam in at around 49.0 with Manufacturing coming at 48.3, suggesting that overall growth conditions remain weak across the world’s leading EMs.

4/11/15: BRIC Manufacturing PMI: October Blues

BRIC Manufacturing PMIs by Markit for October were out earlier this week, so here is the summary of latest changes:

Russia:
Russian manufacturing PMI posted a reasonably significant improvement, rising from 49.1 in September to 50.2 in October, and marking the first month since November 2014 of above 50 readings. That said, the indicator is statistically indistinguishable from 50.0 and the level of activity uplift is weak. Per Markit release, “new orders placed with manufacturing companies in Russia grew for the second successive month in October. The rate of expansion was the sharpest since November 2014, despite being modest overall. The increase in new business was driven by stronger demand from the domestic market, however, as new export orders declined. …Workforce numbers at Russian manufacturers contracted in October. However, the latest reduction in headcounts was the weakest for seven months. The sharpest drop in employee numbers was registered by consumer goods producers, according to sector data.” On a 3mo average basis, 3mo average through October stood at 49.1, somewhat better than 48.2 3mo average through July 2015, but still below 50.6 reading in 3mo through October 2014. Overall, Manufacturing reading for Russia confirms weak stabilisation in growth trend with PMIs rising for the second consecutive month. At this stage, it is too early to call recovery based on these readings, but a positive sign is that Manufacturing sector is no longer a negative factor in determining growth in the economy. 

India:
Indian Manufacturing PMI posted weaker reading in October, falling to 50.7 from 51.2 in September. This is the weakest reading in the index since December 2013 (when it stood at 50.7 as well). On a 3mo average basis, 3mo average through October stood at 51.4, weaker than 52.2 3mo average through July 2015, and marginally below 51.7 reading in 3mo through October 2014. Per Markit release: “the latest PMI dataset highlighted weaker growth of both output and new orders. Encouragingly, companies added to their worforces for the first time since January and continued to increase buying levels. …the PMI has recorded above the crucial 50.0 threshold in each month since November 2013. Output growth eased in October on the back of a slower increase in new orders.” In summary, Indian manufacturing sector has avoided contraction in activity, but growth conditions have again deteriorated - with index declining for the third month in a row.

China:
Chinese manufacturing PMI came in at 48.3 in October, up from 47.2 in September, but still below 50.0. This means that Chinese manufacturing has now been in a contraction territory for the 8th consecutive month. 3mo average through October stood at 47.6, weaker than 48.8 3mo average through July 2015, and below 50.3 reading in 3mo through October 2014. Per Markit: “Total new business declined only modestly, helped in part by a renewed increases in new export orders. This in turn contributed to softer contractions of output and employment in October. Operating conditions have now worsened in each of the past eight months, though the latest deterioration was the weakest since June.”

Brazil:
Brazil manufacturing sector shrunk at a record breaking pace, posting October PMI at 44.1 down from an already abysmal 47.0 in September. This marks the lowest reading in PMI for 79 months running and ninth consecutive month of sub-50 readings. 3mo average through October is now standing at 45.6, which is down from the extremely poor 46.5 3mo average through July 2015. Over 3mo through October 2014 the index was reading 49.5. Per Markit: “PMI data for October indicated that Brazil’s manufacturing recession worsened. Rates of contraction in both output and new orders accelerated to the fastest since the financial crisis, leading companies to cut jobs at the quickest pace in six-and-a-half years. Output fell for the ninth consecutive month, the longest sequence of continuous reduction since the global financial crisis. ...October saw the rate of contraction accelerate to the sharpest since March 2009.”

Overall:
BRIC Manufacturing sector performance posted very poor figures in October, following on already poor performance in 3Q 2015. This suggests that the global economic growth slowdown remains in place despite some firming up if data coming from Europe. Amongst BRIC economies, India remains the strongest performer, with Russia now close second. China is continuing to post weak data, while Brazil is in an outright deep sectoral recession.

6/10/15: BRIC Quarterly Economic Activity & PMIs: 3Q 2015

Now, as promised, the summary of 3Q 2015 BRIC PMIs and the insights these give us into global growth trends. Note: series history refers here to data from 1Q 2006, since some countries in the group only started collecting PMI data from that period.

Brazil:

• Brazil’s Manufacturing PMI averaged poorly 46.7 in 3Q 2015, which is… drum roll… an improvement on disastrous 46.1 recorded in 2Q 2015. All in, Brazil manufacturing sector contraction is now 6 consecutive quarters-long. Over the last two consecutive quarters, Brazil posted the worst Manufacturing sector performance of all BRIC economies. 
• Meanwhile, Brazil Services PMI tanked to 41.9 on 3Q 2015 average basis from already abysmal 42.3 reading in 2Q 2015. This means that Brazil Services sectors are in a deep contraction over the last 6 months and the rate of contraction accelerated in 3Q 2015. This is the worst quarterly reading in all BRIC economies for Services sector for the second consecutive quarter running and the fourth consecutive quarter of recession in Brazil’s Services. 
• While Manufacturing PMI in 3Q 2015 was the fifth lowest in history of the series, Services PMI hit its lowest level in history. In brief, Brazil is in deep trouble and is currently the worst performer across both manufacturing and services sectors of all BRIC economies. Brazil recorded now four consecutive quarters of sub-40 readings in both indices - the only economy in the BRIC group to have done so (in Russia case, such coincident sub-50 readings have occurred for the duration of only two quarters) in post-Crisis period.

Russia:

• Russian Manufacturing PMI averaged 48.4 in 3Q 2015 unchanged on 48.4 reading in 2Q 2015. This is the lowest (tied with 2Q) reading since 1Q 2014 and marks the third consecutive quarter of sub-50 readings in the sector. The level of contraction singled by 48.4 reading is, however, not particularly remarkable, marking the 6th sharpest rate of activity decline in series history.
• Russian Services PMI posted a reading of 50.7 in 3Q 2015, consistent with weak growth, following 51.0 reading in 2Q 2015 and marking two consecutive quarters of above 50 readings. Growth is still weak in the sector, with 3Q 2015 reading being 9th lowest in series history.
• Overall, Russian economy is still in a recessionary scenario, judging by PMIs although some improvement is visible in the Services side of the economy. In my view, it is too early to call the bottom of the recession, yet, but there are some potentially encouraging signs emerging.
• Russia remained the second weakest economy in the BRIC group, only marginally (by about 0.1 points) underperforming China when comparative is taken across both sectors of the economy.

China:

• Chinese Manufacturing PMI fell off the cliff in 3Q 2015, declining to 47.4 compared to 49.2 in 2Q 2015. This marks second consecutive quarter of sub-50 readings for the index. 3Q 2015 index was 3rd lowest in the history of the series, highlighting just how sharp the deterioration was. Over the last 4 quarters, Chinese manufacturing failed to post a reading above 50.0 in all quarters, meanwhile, over the last 16 quarters, Chinese Manufacturing posted a statistically significant growth reading in only one quarter.
• China Services PMI fell from 52.7 in 2Q 2015 to 51.9 in 3Q 2015. This is the 5th lowest reading in the history of the series and, although nominally above 50.0, statistically is not consistent with a signal of even moderate growth. 
• In simple terms, China is getting dangerously close to statistically zero growth across the economy, which, in my view - given the low quality of Chinese official data - can be anywhere around 3-4 percent official GDP expansion for 2015. Potentially - lower. 

India:

• Indian Manufacturing PMI continued to lead the BRIC economies indices, rising to 52.1 in 3Q 2015 from 51.7 in 2Q 2015. Still, the case of growth is 9th slowest in data series history.
• Indian Services PMI posted a strong rebound from 49.9 reading in 2Q 2015 to 51.3 in 3Q 2015. Even with this rebound, latest indicator is signalling 10th slowest rate of growth in the Services side of the economy.
• Overall, India returned to the scenario of broadly based (across both Services and Manufacturing) growth in 3Q 2015. However, considering past performance, growth across both sectors in India was anaemic in 3Q and it has been weak since the start of 2013.

Charts below illustrate key trends:

Overall, BRIC group activity has been pretty disastrous in recent quarters, as shown in the Chart below

As the above illustrates, combined BRIC Manufacturing index is currently running at 48.5 down from 49.4 in 2Q 2015 and marking second consecutive quarter of sub-50 readings. This the third worst performance level for the indicator. Across Services sectors within the BRIC economies, activity also fell in 3Q 2015 (to 50.7) from already weak 50.9 in 2Q 2015. 3Q 2015 Services reading is 5th worst in history.

Table below summarises recent changes in quarterly PMIs:

Key conclusions: 

• BRIC economies are in a sharp, structural slowdown across both manufacturing and services, with Brazil and Russia lingering in sustained recessions, China effectively falling off the growth cliff and India slowing down, but still generating positive growth. The rot is global - it is driving global trade and currencies imbalances and is also driven by global trade, demand and currencies imbalances. With the world’s largest EMs in deep trouble, one has to wonder how low can global GDP growth revisions go in months ahead.
• The structural or longer-term nature of this rot is best highlighted in the last chart above, showing clearly the dramatic trend decline in Manufacturing activity starting with 2Q 2011, followed with the onset of decline in Services side of the economy in 2Q 2013.

Note: Monthly PMIs for September were covered in previous posts:
- For Services and Composite PMIs: here.
- For Manufacturing PMIs: here.

6/10/15: BRIC Services & Composite PMI: September 2015

BRIC Services PMIs and Composite PMIs are in for September. I covered Manufacturing PMIs for BRTIC economies earlier here.

Unlike Manufacturing sector, BRIC Services sector did much better, posting overall a shallow, but positive growth.

• Russia Services PMI was covered in detail in this post. Overall, in the end Russia Services PMI reading for September ended up being tied for the highest position in the entire group alongside India’s
• India’s Service PMI came in at 51.3, down from 51.8 in August and marking third consecutive month of above 50 readings. The rate of growth singled by the Indian PMI is, however, relatively weak. 
• China Services PMI came in at 50.5, the second weakest reading for a BRIC economy and down on 51.5 in August. Statistically-speaking, just as with Russian and Indian Services indicator, Chinese Services PMI was not distinguishable from zero growth 50.0 marker. For the economy that never posted below 50 reading in its Services PMIs, however, current reading for China is probably consistent with a sector growth plummeting sharply. This is the lowest rate of activity since July 2014. September reading was also second lowest on record.
• Brazil Services PMI was the only reading below 50 in the BRIC group and at 41.7 it is a very poor reading and is below August 44.8. Brazil has now posted the weakest of Services PMIs reading for all BRIC economies every month since March 2015.

As Chart above clearly indicates, Brazil weakness is sharp and sustained over some time now. In contrast, Russia has managed some stabilisation in the Services sector with very strong upward correction starting from February 2015 low. Overall, you can also see the extremely compressed and subdued growth activity in the Sector across the BRIC economies starting with 3Q 2013 on. 

Summary table below highlights recent changes in Manufacturing and Services PMIs for the BRIC economies:

Now, let’s consider Composite PMIs.

• Again, Russia Composite PMI was covered in the separate earlier post here. In comparative terms, Russian Composite PMI was the second highest in the BRIC group after India.
• India Composite PMI came in at 51.5 in September compared to 52.6 in August, marking a deterioration in the rate of growth in the economy. 51.5 reading is border-line significant in statistical terms, suggesting possibly sharper downturn in the economic activity than simple decline of 1.1 points suggests. Still, India posted the best performing Composite PMI of all BRIC.
• China Composite PMI came in at disappointing 48.0 in September, down from an already weak 48.8 in August. Last two months readings suggest negative growth in the Chinese economy, although it is hard to call what exactly is happening in the actual economy. Nonetheless, China was a negative drag on the BRIC growth for the second month in a row.
• Brazil Composite PMI literally is tanking. It hit 42.7 reading in September, down from 44.8 in August. This marks a seventh consecutive month of composite PMI for the country signalling an outright contraction in output. 

Charts above plot BRIC Composite PMIs. Several things worth noting here are:

1. There is continued divergence in Russian PMIs (to the upside) and BRIC ex-Russia PMIs (to the downside) driven by sharp deterioration in Brazil economic environment over the last 7 months. Local peaking of BRIC ex-Russia PMIs in February 2015 is now fully exhausted and in September, BRIC ex-Russia index took a sharp nosedive. Trendiness reflect this divergence and show that it is currently well-established. In other words, although Russian economy is performing poorly, ex-Russia BRIC economies are performing even worse, even if we include into this sub-grouping a relatively well performing India.
2. Overall, BRIC Composite PMI is on a sustained downward trend since June 2014 and in July-September 2015 this downward trend accelerated sharply. BRIC Composite PMI now signals recessionary conditions across the whole group of four largest Middle-Income and Emerging Markets economies. On a longer time line, weak performance in the BRIC economies has been now a feature of the global growth environment since the end of 1Q 2013.

I will be covering quarterly PMI signals in the subsequent post, so stay tuned.

2/10/15: BRIC Manufacturing PMI: 7th month of Sectoral Recession in September

Manufacturing PMIs for BRIC countries for September generally remained on the downward trend established some 7 months ago.

• I have covered Russian Manufacturing PMI earlier here with index reading signalling slower rate of decline in the sector activity in September, rising to 49.1 from 47.9 in August. This is the highest reading in the series since February 2015, but marks 10th consecutive month of sub-50 readings.
• China Manufacturing PMI was covered in detail here showing a strong signal of continued deterioration in the economy.
• Meanwhile, Brazil posted a rise in Manufacturing PMI from horrific 45.8 in August to ugly 47.0 in September. This was the eighth consecutive month of sub-50 readings in Brazil Manufacturing sector, with extremely weak performance setting in back in Q 2014 and continuing basically without interruption since then. Per Markit, “although rates of contraction in new orders and production eased, the downturn remains sharp. Companies continued to shed jobs and reduce inventory levels.” Quarter performance was poor, but I will cover this in a separate post. Brazil is now the worst performing BRIC economy in Manufacturing sector activity for 8 months running.
• India continued to break the BRIC trend, posting another above 50 PMI reading for Manufacturing Sector. India Manufacturing PMI in September was running at 51.2, down from 52.3 in August and marking the slowest pace of growth in seven months, “mirroring a slower increase in new orders. Staffing levels were, consequently, reduced and purchasing activity rose at the weakest pace since December 2013. …New business from abroad expanded at the slowest pace in the current 24-month sequence of growth and one that was marginal overall.”

Table below summarises key readings:

Chart below illustrates key trends:

Overall, Manufacturing activity remains on a downward trajectory in 3 our of 4 BRIC economies, with negative trends accelerating in the case of China (second worst performer for the third month in a row), remaining steady in the case of Brazil (worst performer over last 8 months), slightly moderating in terms of contraction in Russia (third worst performer over the last three months). Meanwhile, growth in India is declining toward anaemic levels of activity. 

3/9/15: BRIC Composite PMI: August

Having covered Manufacturing (link here) and Services PMIs (link here) for BRIC countries, consider Composite PMIs next.

Note, to make series consistent with my previous indicator, I use x2 factor on composite PMI readings from Markit, going forward, so reference number here is not 50.0 but 100.0.

• Brazil Composite PMI firmed up marginally to 89.6 in August from 86.3 in July. This is the fifth highest reading in recent months, but sixth consecutive reading below 100. Per Markit: "Rising to a five-month high… the Brazil Composite Output Index pointed to a further, although weaker, decline in private sector output. Whereas manufacturing production decreased at a quicker rate, the reduction in service sector activity softened. … New business in the Brazilian service sector decreased for the sixth straight month in August. …Order book volumes at manufacturers dipped at the fastest pace in four years. Subsequently, the contraction in total private sector new work accelerated to the sharpest in three months."
• Russian Composite PMI was also soft, falling to 98.6 in August compared to 101.8 in July, returning the economy toward renewed recessionary momentum after fragile improvement in the first month of 3Q 2015. More on Russian Composite PMI here: http://trueeconomics.blogspot.ie/2015/09/3915-russian-manufacturing-services.html.
• China Composite PMI too posted sub-100 reading, falling to 97.6 in August compared to 101.6 in July. Per Markit release: "Though only modest, it was the fastest contraction of output seen since February 2009. The renewed decline in overall output was largely driven by a faster contraction of manufacturing production in August. Furthermore, the latest fall in manufacturing output was the quickest seen in 45 months. Meanwhile, slower growth in service sector business activity also weighed on the headline index. Consequently, total new business at the composite level fell for the first time since April 2014, albeit marginally. ...the latest expansion in service providers’ staff numbers was the weakest seen in the current two-year sequence of job creation and fractional. Job shedding persisted at manufacturing companies, with the pace of reduction quickening slightly since July. Overall, composite employment fell for the third month in a row and at a modest pace."
• India Composite PMI firmed up to 105.2 from 104.0 in July, marking improved growth outlook for the economy and breaking, once again, trend with the rest of the BRICs. Per Markit: "India’s private sector economy improved further in August. The seasonally adjusted Nikkei India Composite PMI Output Index rose to a five-month high… The uptick in growth was boosted by a quicker expansion of services activity, as the increase in manufacturing production softened in August. …New business across the private sector as a whole expanded at a moderate pace that was the quickest since March."

SUMMARY: As charts above show, BRICs as a block are now exerting negative drag on the global economy. This is extremely worrying especially as the core drivers for this weakness are now China and Brazil, opposed to Russia. While Russian economy remains in a recession, overall, it is responsible for lesser share of negative momentum in the BRICs index than the other two troubled economies since around the start of 2Q 2015.

5/8/15: BRIC Composite PMIs: July 2015

I covered BRIC economies' Manufacturing PMIs for July here: http://trueeconomics.blogspot.ie/2015/08/4815-bric-manufacturing-pmis-july-2015.html.

Now, let's take a look at Services PMIs and Composite.

• Brazil Services PMI fell from an extremely poor 39.9 in June 2015 to an abysmal 39.1 in July, reaching a joint historical low (total history for the series spans 101 months). July reading was so poor, 3mo average through last month fell to 40.5 against 3mo average through April 2015 at 48.3 and 3mo average through July 2014 at 50.7.
• Per Markit: "The downturn remained widespread across the services categories covered by the survey, with all of the sub-sectors registering substantial falls in business activity. The steepest contraction was at Hotels & Restaurants, followed by Transport & Storage. The level of new business in the service economy decreased for the fifth straight month in July. The pace of reduction was slightly faster than in the prior month, but nonetheless still less severe than in May (when new business fell at the quickest pace since April 2009). 
• Brazil's woeful Services PMI was compounded by a drop in Manufacturing (see summary of both below), driving official Brazil Composite PMI deep into contraction territory at 40.8 against already extremely low 41.0 in June. Overall, Composite index has hit the lowest point since March 2009.
• Overall: there is absolutely no doubt that both Services and Manufacturing are currently in a recession, with below 50 readings in both sectors present since March 2015

• Russia Services PMI strengthened from 49.5 in June to 51/6 in July marking the return to growth in the sector. On a 3mo average basis, July 2015 reading was at 51.3, well ahead of 3mo average through April 2015 (46) and 3mo average reading through July 2014 (48.5). 
• However, Russian Manufacturing PMI (see separate coverage here: http://trueeconomics.blogspot.ie/2015/08/3815-russia-manufacturing-pmi-july-2015.html).
• The respective Russian Composite Output Index improved to 50.9 in July, up from 49.5 in the preceding month. Per Markit: "Supporting the rise in overall activity for the service sector was a fourth consecutive month of increasing volumes of incoming new business. Moreover, the rate of growth accelerated to the highest recorded for twenty months amid reports that a more positive economic climate was driving demand for services upwards."
• More details on both Russia Composite PMI and Services PMI here: http://trueeconomics.blogspot.ie/2015/08/5815-russian-services-composite-pmis.html.
• Overall: these are some tentative early-stage signs of economic stabilisation and possibly recovery. Too early to call a new trend, however, and any talk of real recovery will require sustained rise in Manufacturing PMI above 51-51.5 mark.

• China Services PMI posted yet another above 50 reading (the Index never once dipped below 50.0 mark) rising strongly from 51.8 in June to 53.8 in July. This is the strongest reading in the Index since August 2014 and brings 3mo average through July 2015 to 53.0, up on 52.4 3mo average through April 2014 and on 51.3 3mo average through July 2014.
• Sub-50 reading in Manufacturing PMI reflective of further worsening in manufacturing downturn in the economy (ongoing since November 2014 with a brief interruption in February 2015) meant that China Composite PMI posted "only fractionally above the neutral 50.0 mark at 50.2, down from 50.6 in June, and pointed to the weakest rate of expansion in 14 months."
• Overall: China remains on slower growth path with Manufacturing under significant pressure. This trend is linked to the fortunes of global trade flows (more so than Services) and to weakening investment outlook for Chinese firms.

• India Services PMI rose to 50.8 in July, marking a very shallow recovery in the sector and breaking two months streak of sub-50 readings. July reading was up on 47.7 in June and on a 3mo average basis, figures through July 2015 are at 49.4 - signalling weak contraction against 3mo average through April 2015 at 53.1 and 3mo average through July 2014 at 52.3.
• Strong Manufacturing performance in PMI terms and weak, but above 50 reading in Services provided upside support for the Composite PMI. Per Markit: "After having fallen in the previous month, output across the combined manufacturing and service sectors in India rose during July. The seasonally adjusted Nikkei India Composite PMI Output Index climbed to 52.0 from 49.2 in June to signal a modest increase in activity. Growth has now been recorded in 14 of the past 15 months. The return to expansion was helped by a first rise in services activity in three months and an acceleration in the rate of manufacturing production growth."
• Overall: India regained its strong performance dynamic in July across both sectors, with relatively weaker performance in Services. Indian economy currently leads the BRIC group in terms of growth momentum as signalled by PMIs.

Summary of changes across both Manufacturing and Services PMIs is provided below:

And chart for Services PMIs illustrates: 

Overall, BRIC activity as contributor to global growth has improved, remains weak. In June, the BRIC group of economies was contracting and exerting downward pressure on global growth. However, in July, they made a positive contribution, albeit extremely shallow.

In recent months, it has become customary for BRIC economies analysts to suggest that Russia is the weakest component to BRIC activity. However, while this assertion was true through 1Q 2015, it is no longer holding since then:

This, however, is of little consolation to an economy in a recession.

3/8/15: Russia Manufacturing PMI: July 2015

Russia Manufacturing PMI posted slight acceleration in downward momentum in July compared to June.

Per Markit release:

• Operating conditions deterioration was "reflective of soft demand which undermined production and new order intakes. Jobs continued to be lost, while firms reduced their inventories at a marked and accelerated pace."
• Profit margins were continuing to fall under pressure: "On the price front, competitive pressures and lower demand encouraged firms to cut their charges marginally during July. That was in spite of a marked and accelerated increase in input costs."
• July data, however, shows that "the rate of decline was fractional and remained centred on the investment goods sector as consumer and intermediate goods both recorded growth of production compared to the previous survey period."
• Forward looking indicators: "Similar trends were seen for new orders, with a fall in orders for investment goods leading to a decline at the aggregate level. …Levels of new business from abroad also continued to decline during July, with the rate of contraction accelerating since the previous survey period to the sharpest recorded since April."

In numbers terms:

• Manufacturing PMI is now down at 48.3 compared to 48.7 in June 2015 and 51.0 in July 2014. 
• 3mo average through July is at low 48.2 against 3mo average through April at 48.9 and against 49.7 3mo average through July 2014.
• Russian Manufacturing PMIs have been below 50.0 mark for 8 consecutive months now.

Overall, the picture is consistent with two key trends that have developed over recent months:

1. Manufacturing sector is not showing signs of stabilisation that are present elsewhere in the economy; and
2. Within the broad sector, imports substitution is presenting some upside opportunities in consumer goods and intermediate goods, while investment-driven capital goods are showing sharp contractions.

9/7/15: BRIC Composite PMIs: June 2015 & 2Q 2015

In the previous post covering Manufacturing & Services PMIs for BRIC economies, I promised to provide a separate summary of composite PMI-signalled activity.

Here is the summary of both Services and Manufacturing PMIs moves in June:

On a simple cumulative basis (unweighted by sector weights, not to be confused with Markit's Composite PMI):

• Brazil composite activity stood at 86.4 in June, down from 88.4 in May. 2Q 2015 average was 88.5 against 98.4 for 1Q 2015 and down from 99.7 for 2Q 2014. In short - we have ongoing and worsening slowdown in activity across both sectors combined, with the fourth consecutive month of the combined reading below expansion line (100).
• Russia composite activity stood at 98.2 in June, down from 100.4 in May. 2Q 2015 average was 99.4 - an improvement on 92.2 for 1Q 2015 and better than 96.4 recorded for 2Q 2014. The ongoing slowdown is moderating, with activity across both sectors combined showing slower rates of contraction in 2Q 2015. That said, combined activity has been posting contractionary signals in 8 out the last 9 months.
• India composite activity fell to 99.0 in June, posting the first month of sub-100 reading since April 2014, down from 102.2 in May. 2Q 2015 average was 101.6 against 105.4 for 1Q 2015 and down from 102.4 for 2Q 2014. This implies that Indian economic activity growth was posting a significant slowdown q/q and y/y in 2Q 2015.
• China composite activity stood at 101.2 in June, down from 102.7 in May. 2Q 2015 average was 101.9 virtually unchanged against 102.0 for 1Q 2015 and up slightly on 101.1 for 2Q 2014.  China's economy was the only economy in the BRIC group that remained above the 100 line in June.

Charts below illustrate the latest trends:

In summary, things are getting worse, progressively across the BRIC economies, with Russia, surprisingly, presenting an upside momentum to the overall group growth dynamics. That said, the trends are yet to be fully established for Russia. Overall, BRICs have now running along the negative growth trend for some time and BRIC combined (weighted by each economy share of total group GDP) momentum is at 99.0 in June, marking the first sub-100 reading since May 2014. 3mo average through 2Q 2015 is at 100.3, down on 1Q 2015 average of 101.4 and down on 2Q 2014 average of 100.8.

9/7/15: BRIC Manufacturing & Services PMIs: June 2015 & 2Q 2015

With BRICS summit on its way, an updated post on BRIC PMIs (data from Markit):

Brazil:

Manufacturing PMI stood at 46.5 in June, singling sharp rate of contraction that was somewhat slower than the decline in May (45.9). Per Markit, "new orders and output both drop at sharp rates; inflationary pressures ease." June PMI was the highest in four months and marks the fifth consecutive month of sub-50 readings. 3mo average is now at 46.1 against 3mo average through March at 48.8 and 3mo average through June 2014 at 48.9.

Services PMI also came in at disappointing levels, falling to an abysmally low 39.9 in June from already low 42.5 in May. This marks the lowest reading in Services PMI since March 2009 and the second lowest reading in Services PMI in history.

As noted by Markit, "Private sector jobs cut at quickest pace for over six years; Steep, but slower, contraction in new orders received by private sector firms."

With 4th consecutive month of sub-50 readings, services PMI averaged 42.3 in 3mo period through June 2015, compared to 49.5 average for the 3mo period through March 2015 and 50.8 for the 3mo average through June 2014.

Overall, "Brazil’s private sector economy registered its sharpest retreat since March 2009. Down from 42.9 in May to 41.0 in June, the Composite Output Index was indicative of a steep drop in activity, with sharp falls seen at both service providers and manufacturers."

Russia:

Russian PMIs are covered in detail here: http://trueeconomics.blogspot.com/2015/07/4715-russia-services-and-manufacturing.html?spref=tw and summarised below in the table.

India:

India's Manufacturing PMI came in at 51.3, signalling weak-to-moderate expansion of manufacturing output and down from 53.5 in May. On a 3mo average basis, June 2015 PMI was at 51.7 - marginally slower than 3mo average of 52.1 for the period January-March 2015 and slightly ahead of 51.4 3mo average registered through June 2014. Markit noted that June figures presented the "slowest rise in new work since September 2014; Negligible increases in input costs and output charges."

On Services PMI side, June reading of 47.7 marks second consecutive month of sub-50 readings and a sharpening in the downturn from 49.6 in May 2015. 3mo average through June 2015 is now at 49.9 against 3mo average through March 2015 of 53.1 and 3mo average through June 2014 at 51.0. Services PMI is now sitting at the lowest level since March 2014.

Per Markit: "Falling to 49.2, from 51.2 In May, the seasonally adjusted Nikkei India Composite PMI Output Index recorded below the crucial 50.0 threshold for the first time since April 2014. Reductions in activity were centred at service providers, as manufacturing production rose during the month."

China:

HSBC Purchasing Managers’ Index for manufacturing posted at 49.4 in June. This was the fourth successive, marginally up on 49.2 in May. This marks 4th consecutive month of Chinese manufacturing PMI readings below 50. Per Markit release, "Output contracts at slower pace as new orders show signs of revival" but "Staff numbers are cut at sharpest rate since February 2009." 3mo average through June 2015 was 49.2 down from 3mo average for 1Q 2015 AT 50.0 and lower than 49.4 3mo average through 2Q 2014.

On services side, PMI posted a significant "moderation in the rate of service sector activity growth. Moreover, it was the slowest expansion in services business activity since January, as signalled by the HSBC China Services Business Activity Index posting 51.8, down from May’s eight-month high of 53.5." However, 3mo average for services was at 52.7 in June 2015, compared to 52.0 in 3mo period through March 2015 and 51.7 for the 3mo average through June 2014.

"HSBC China Composite PMI™ data (which covers both manufacturing and services) pointed to a further rise in total business activity in China during June. However, the rate of expansion eased to a marginal pace that was the slowest recorded since May 2014. This was signalled by the HSBC Composite Index posting only slightly above the neutral 50.0 mark at 50.6 in June, down from 51.2 in May."

CHARTS

As shown in the charts above, growth conditions remain negative in 3 out of 4 BRIC economies in Manufacturing and Services. No single BRIC economy is posting broad cross-sectoral growth in June and on quarterly averages basis, 

• Brazil is running negative growth signals in both Services and Manufacturing;
• Russia and China are running negative growth in both Manufacturing;
• India is running negative growth in Services.

This contrasts with 1Q 2015 when Brazil and Russia were posting negative growth across both Services and Manufacturing, while India and China were posting positive growth across both sectors.

Things are getting tougher in the BRICs...

Stay tuned for composite analysis and summary next.

4/7/15: Russia Services and Manufacturing PMIs: June 2015

Manufacturing: 

• "Operating conditions in Russia’s manufacturing sector continued to deteriorate modestly during June as output, new orders and employment all fell."
• "Price levels continued to rise, albeit at historically muted rates, while shortages of working capital and input inventories meant firms continued to meet their orders directly from stock wherever possible."
• Manufacturing PMI posted 48.7 in June, still in contracting mode, but a slight improvement on 47.6 in May. 
• June marked 7th consecutive month of Manufacturing PMIs below 50.0
• 3mo average through June was 48.4 against 3mo average through March at 48.5 and 3mo average through June 2014 at 48.8. In other words, the rate of contraction remained broadly the same in 3mo through June 2015 as in previous 3mo period.

Services:

• Slight fall in service sector business activity during June as activity declined in spite of ongoing growth in new work
• Extra capacity signalled in service sector as backlogs and employment both continue to fall
• Service providers retain some optimism of pickup in activity in coming year
• "Activity levels in Russia’s service sector were down marginally in June as ongoing growth in new business proved insufficiently strong relative to capacity levels. …Capacity was cut in response through to another marked fall in staffing levels."
• Services PMI fell to 49.5 in June from 52.8 in May, reversing two months of above 50.0 readings in April-May.
• 3mo MA through June 2015 was 51.0 against 3mo average through March 2015 at 43.8 - a marked improvement for the 2Q 2015. 3mo average through June 2014 was 47.6, which means that 2Q 2015 saw, on average, positive, but weak growth against sharp contraction in 1Q 2015 and moderate contraction in 2Q 2014.

Composite:

• Markit Russia Composite PMI Index recorded a level of 49.5 in June, down from 51.6 in May and a three-month low. 
• Composite PMI 3mo average through June 2015 was 50.6, well ahead of 45.7 average through 1Q 1015 and 48.3 average for 2Q 2014. Again, in quarterly terms, 2Q 2015 was stronger, signalling growth, compared to contractionary dynamics in 2Q 2014 and 1Q 2015.

Note: most recent trend (downward shift in overall activity across all two sectors) set in around October 2012 and run through February 2015. Since February 2015, we are seeing some improvements in the series, but no new trend, yet.

2/6/15: BRIC Manufacturing PMI: Continued Pain in May

Things got pretty ugly for Manufacturing sector across the BRIC economies in April, and the trend continues into May. The latest data from Markit shows that:

• Brazil Manufacturing PMI slipped marginally from strongly contractionary 46.0 in April to 45.9 in May. 3mo average through May is now at an abysmal 46.0 against 3mo average through February at 50.2, 3mo average through May 2014 was 49.6. All in, this is the fourth consecutive month of sub-50 readings and adjusting for statistical significance, PMI index rose above 50.0 only once over the last 16 months. This May reading is the lowest for any month since September 2011.
• Russia Manufacturing PMI fell from a contractionary 48.9 reading in April to a very poor 47.6 in May. 3mo average through May is now at 48.2 - not a disaster, but poor - against 3mo average through February at 48.7, 3mo average through May 2014 was 48.6. All in, this is the sixth consecutive month of sub-50 readings and adjusting for statistical significance, PMI index rose above 50.0 only once over the last 9 months. May 2015 reading ties for the lowest level of PMI for the Russian economy since June 2009.
• China Manufacturing PMI rose marginally from a contractionary 48.9 reading in April to a still sub-50 reading of 49.2 in May. 3mo average through May is now at 49.2 - a poor reading for the economy - against 3mo average through February at 50.0, 3mo average through May 2014 was 48.5. This May marks the third consecutive month of sub-50 readings and adjusting for statistical significance, PMI index rose above 50.0 last time in July 2014.
• India Manufacturing PMI continued to buck the BRIC trend, staying above 50.0 mark, albeit slipping from 53.0 reading in April to 52.6 in May. 3mo average through May is now at 52.0 against 3mo average through February at 52.9, 3mo average through May 2014 was 51.3. All in, this is the 19th consecutive month of above-50 readings.

Overall, three out of four BRIC economies posted sub-50 PMIs for Manufacturing in May, for the third consecutive month in a row, while the fourth BRIC economy (India) posted slowdown in the rate of positive growth in the sector.

1/6/15: Russian Manufacturing PMI: May 2015

Russia Manufacturing PMI came in at disappointing 47.6 in May 2015, compared to 48.9 in April. This reverses slight improvement in April compared to March and puts PMI at the level matching the lowest reading since June 2009, achieved back in January 2015.

Weak conditions signal reversal of the slightly improving trends in the economy over 1Q 2015 (see following post on this).  We are now in 6th consecutive month of sub-50 PMI readings for the sector, and 24 months average PMI for Russian Manufacturing stands at 49.4.

5/5/15: BRIC Manufacturing PMI: Further Growth Slowdown in April

BRIC manufacturing PMIs (Markit) are out for April, and the signs are poor in terms of economic growth prospects for the block of the four largest emerging economies.

• Brazil manufacturing PMI came in at 46.0 in April, down from already abysmal 46.2 in March, singling deepening and accelerating contraction. This the the third consecutive month of Manufacturing PMI below 50.0. 3mo average is at 47.3 and previous 3mo average (through January 2015) is at 49.9. The weakness in Brazil manufacturing sector performance is not new: in 3mo through April 2014 the index reading was just 50.1. Weak growth or contraction (below 51.0) has been recorded every month since March 2013. As of April, Brazil has posted the lowest monthly and 3mo average readings for Manufacturing PMIs for all BRIC countries.
• Russian Manufacturing PMI posted a slight improvement in April, rising to 48.9 from 48.1. Nonetheless, April was the fifth consecutive month of sub-50 readings and the 'improvement' is reflective of a slowdown in the rate of contraction, not a reversal of contraction. 3mo average through April is at 48.9 which is still worse than the 3mo average through January 2015 (49.4) and only marginally better than 3mo average through April 2014 (48.4). Last time Russian manufacturing PMI reading was in healthy territory was November 2014 when it posted a surprising reading of 51.7, but overall, weak performance can be traced back to July 2013.
• Chinese Manufacturing PMI continued to post contraction in the sector coming in at 48.9 in April, marking worsening in the growth conditions compared to 49.6 reading in March and the second consecutive month of sub-50 readings. 3mo average is now at 49.7, marginally weaker than 49.8 3mo average through January 2015. Current 3mo average is, however, stronger than 48.2 average for the 3 months through April 2014.
• India was the only BRIC economy that managed to sustain above-50 reading for the Manufacturing PMI. However, at 51.3 in April, the PMI is still down on 52.1 in March. This marks 18th consecutive monthly above-50 reading for the series.

Overall, April data indicates significantly adverse conditions in BRIC manufacturing, with Brazil being by far the worst performer in the group both in terms of monthly reading and 3mo average. As the chart above shows, excluding India, BRIC Manufacturing PMIs trend to the downside from mid-2014 levels with Brazil readings at the worst levels since September 2011, Russia continuing to perform at the levels consistent with the worst economic slowdown since October 2008-July 2009, China showing renewed weaknesses consistent with overall zero growth trend present since around Q2 2013. India bucked the BRIC pattern by posting a positive growth trend since Q4 2013.

7/4/15: BRIC PMIs via Markit

, it is commonly said, is the highest form of ... 

And so Markit now releases a 'summary' of BRIC PMIs... not quite in a full release, but...

Useful... and you can read more in-depth analysis of BRIC Services PMIs here: http://trueeconomics.blogspot.ie/2015/04/6415-bric-services-pmis-overall.html and on Manufacturing PMIs here: http://trueeconomics.blogspot.ie/2015/04/2415-bric-manufacturing-pmi-march-marks.html

Ah, the perils of doing analysis in the age when the big boys follow... As always, thanks to Markit for publishing at least few remaining headline numbers of PMIs.

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.

2/4/15: BRIC Manufacturing PMI: March Marks Further Slowdown in Growth

Markit released Manufacturing PMI for India, so here is a full update on Manufacturing sector indicators across the BRIC economies:

• Brazil Manufacturing PMI fell to 46.2 in March from 49.6 in February, marking the second consecutive month of sub-50 readings. 3mo average through March was 48.8 against 3mo average through December 2014 at 49.3 and 3mo average through March 2014 at 50.6. The trend is down and getting worse. Brazil registered the sharpest rate of contraction in PMI of all BRIC economies.
• Russia Manufacturing PMI also came in at disappointing 48.1, down from 49.7 in February, marking the 4th consecutive month of sub-50 readings. Russia posted the second sharpest contraction in manufacturing of all BRIC economies and the sharpest on a 3mo average basis. 3mo average through March was 48.5, down from 50.3 for the 3 months through December 2014, but up on 48.3 3mo average through March 2014.
• China Manufacturing PMI came in at 49.6 in March, the first reading below 50.0 after 50.7 was registered in February 2015. However, over the last 6 months, Chinese manufacturing posted 3 months of sub-50 readings and one month of 50.0 reading. 3mo average through March stood at 50.0 - basically zero growth signal, against 3mo average through December 2014 at 50.1 (again, zero growth) and 3mo average through March 2014 of 48.7.
• India posted the only rise in PMI and the only case of manufacturing PMI above 50.0. March reading was 52.1, a gain on 51.2 in February, marking 17th consecutive month of above-50 readings. 3mo average through March was 52.1, which is poorer than 3mo average through December 2014 (52.6) but an improvement year-on-year (3mo average through March 2014 was 51.7).

Chart and table to summarise:

Overall, with exception of India, all BRIC Manufacturing PMIs are now below 50.0 and all are trending down since July 2014 on. Brazil is now the worst performing country in the group, for the second month in a row.

Data presented by Markit signals a deepening slowdown in March compared to February in the group of core emerging markets, which does not bode well for global growth outlook.