PMI INDEX GROWTH IN BRICS COUNTRIES HAVE MIXED REPORT

INDIA

The Composite PMI in India increased to 49.2 points in July 2021 from 43.1 points in the previous month. The reading pointed to the third successive monthly decline in business activity, however, the slowest rate of reduction over this sequence. The downturn was restricted by a rebound in manufacturing production, with services activity contracting at a solid but softer pace. Aggregate new orders fell for the third straight month, albeit fractionally. At the same time, private sector employment dropped further, marking a 17-month sequence of job shedding. There was a marginal uptick in headcounts across the manufacturing industry, but services jobs continued to fall. On the price front, input prices inflation was unchanged. Meanwhile, selling prices rose at a softer pace.

CHINA

The Caixin China General Services PMI climbed to 54.9 in July 2021 from a 14-month low of 50.3 in June, signalling a sharp and accelerated expansion of services activity amid the successful containment of the recent uptick in COVID-19 cases. New order growth accelerated from June's recent low, while employment rose slightly on the back of a renewed increase in backlogs of work. In the meantime, new export business was broadly stagnant as the pandemic continued to weigh on global demand. On the price front, the rate of input cost inflation quickened notably, while output charges posted the largest increase this year. Looking ahead, business sentiment picked up from June's nine-month low but remained softer than that seen on average over the series history.

SOUTHAFRICA

The IHS Markit South Africa PMI fell to 46.1 in July of 2021 from 51 in June, pointing to the first contraction in the country's private sector activity in ten months, amid civil unrest and Level 4 COVID-19 restrictions. Output, new orders, stocks of purchases and employment fell sharply. Supply chains were also impacted by unrest, as lead times lengthened at a much faster rate than in June. On the price front, Input prices continued to rise strongly, though the pace of inflation eased to a four-month low. Consequently, the rate of output charge inflation also softened to a four-month low. Looking forward, business sentiment weakened again in July, and was the lowest seen for almost a year.

RUSSIA

PMI decreased to 53.5 in July 2021 from 56.5 in the previous month. The latest reading marked the seventh straight month of expansion in the sector, but the weakest expansion since February, as both output and new orders growth eased to the slowest in five months. At the same time, new export orders contracting for the first time in five months. Also, the rate of job creation eased to only a modest pace that was the slowest since March, as backlogs of work fell at the quickest pace since November 2020. On the price front, input cost inflation slowed to the softest in six months, while output charges inflation eased to the slowest since April. Finally, business morale deteriorated to the weakest in 2021.

BRAZIL

The IHS Markit Brazil Services PMI rose to 54.4 in July of 2021 from 53.9 in the prior month. The latest reading highlighted a second successive expansion in the services sector that was the fastest since January of 2013, amid robust inflows of new work, especially from abroad. This underpinned the sharpest expansion in output since the start of 2013. At the same time, the improvement in demand conditions led to the joint-quickest accumulation of outstanding business volumes on record, which in turn boosted job creation. On the price front, inflationary pressures subsided in July as both input costs and output charges continued to rise solidly but at weaker rates. Finally, the level of positive business sentiment was the second-strongest in seven months, behind June, but remained below the series average.