Manufacturing sectors in Emerging Markets (EM) are still in stagnation, as reflected by current PMI indicators. In March, the Chinese official manufacturing PMI improved visibly from 49.2 to 50.5 points (see our recent analysis) but activity data in other EM was still quite flat. Our aggregate EM excl. China PMI was at 50.2 in March, marking the fourth month in a row of a near stagnation index. Overall, the isolated Chinese recovery shows that its stimulus did not help other EM yet. The EM with the weakest manufacturing activity indicators are still those that are quite open and specialized on the following sectors: metals, cars and telecoms (three sectors which currently also show low global PMI indices, according to IHS Markit). South Korea, Taiwan, Mexico, Poland and Czechia are exposed to weaknesses in one or several of these sectors. Moreover, the PMIs of Turkey and South Africa are still well below 50. These two large EM experienced a recession in the last quarters and there is evidence that the pressure on these two economies has remained strong.
