Observers of last month’s BRIC summit in South Africa noted that the countries needed to face up to the slowdown (paywall) that has followed the emerging markets boom. That challenge was underscored on Monday as India and Russia posted disappointing industrial output numbers, while China showed that its recovery is progressing slowly. (Brazil’s numbers are due later in the day.)
China’s official manufacturing purchasing managers’ index rose to 50.9 in March—an 11-month high, up from 50.1 in February—but it failed to meet the expectations of analysts polled by Reuters (52.0) and Bloomberg (51.2). Any number over 50 indicates the economy is expanding. Analysts cited “headwinds” impeding faster growth, including curbs on property prices, a crackdown on banking practices, and the prospect of tighter monetary policy. “It’s not quite strong,” IHS senior economist Xianfang Ren told CNBC. “This is not a cheerful number for us to celebrate.”
China’s HSBC manufacturing purchasing manager’s index, based on a smaller sample with more independent, non-state-owned enterprises, rose to 51.6 in March, from 50.4 in February.
India’s HSBC PMI fell to 52.0 in March, from 54.2—the biggest drop and lowest level since 2011. The Indian manufacturing sector suffered from lower domestic and international demand, and electricity shortages that crimped output.
Russian’s HSBC PMI also fell to 50.8 in March, from 52.0. “A deeper decline in new export orders and more significant staff level reduction … is particularly concerning,” said HSBC economist Alexander Morozov.
Outside of the BRIC bloc, HSBC announced encouraging PMI data for South Korea (up to 52.9 from 50.9), Vietnam (up to 50.8 from 50.0), Taiwan (up to 51.2 from 50.2), and Indonesia (up to 51.3 from 50.5).