Russia manufacturing

Two out of the four BRIC economies of Brazil, Russia, India and China face severe labour shortages as soon as 2020.

“Many emerging markets are reaching the final phase of their demographic peak,” say the authors of a report by Boston Consulting Group which quantifies the extent of potential labour shortages and surpluses globally over the next 16 years.

The danger of a declining work force is well recognised in China, which is already suffering the impact of the one-child-per-family policy, in effect since 1979. BCG estimates that China’s surplus of about 65m workers in 2020 could turn into a shortage of up to 24.5m people by 2030. Recent proposals to ease the one-child policy, if implemented, would have only a limited impact, since children born now would not enter the workforce until after 2030. Read more

April was a pretty subdued month for emerging market manufacturers. But it seems to have been worse for the BRIC countries – especially China, Russia and Brazil (but not for India) – than for smaller EM economies in general. Some countries that thrive on Eurozone demand posted a fairly buoyant performance.

Overall, EM manufacturing’s PMI (purchasing managers index) fell to 49.6 in April, its lowest reading since June last year and the second straight month it has been below 50, which in theory separates contraction from expansion. Read more

Russia’s Sukhoi Civil Aviation has reached a preliminary agreement to supply up to 100 Superjet-100’s to China in what would be by far the biggest sale yet of its flagship regional passenger jet. Apart from swelling Sukhoi’s order books, a Chinese deal could help Russia circumvent possible western sanctions.

Sukhoi Civil Aviation signed a memorandum of understanding (MOU) to sell up to one hundred Superjet-100s to O’Bay Aircraft, a privately held airline based in Henan province in north China. As part of the deal, the two sides are considering a joint assembly venture to make SSJ-100’s in Zhengzhou, the capital of Henan province. Read more

An Italian automatic loom produces tapestries with portraits of Russia's Prime Minister Vladimir Putin at the Uzor (Pattern) weaving mill in the town of Vyritsa near the Russia's second city of Saint Petersburg, on February 2, 2012.Russia’s manufacturers are ending the year on a rather downbeat note, according to the latest Purchasing Managers’ Index from HSBC/Markit.

After a year and a bit of plus-50 readings, the number for December was 50.0 – slap bang on the line that separates contraction from expansion. Read more