The services and manufacturing activities across emerging markets recovered slightly in the month of April. The HSBC Composite Emerging Markets Index, based on the survey of around 8,000 firms in 17 countries, inched up to 50.4 in April, from 50.3 in March.
However, the HSBC survey showed falling output in the four largest emerging economies. It noted that manufacturing output across largest emerging markets was broadly stagnant in April, while services activity growth remained weak in the reported month. Indian business activity fell for the ninth time in ten months with HSBC India Composite Output Index coming at 49.5 in the reported month. Among other emerging economies, overall business activity across the Chinese manufacturing and services sectors declined for the third consecutive month in April, while private sector output in Russia fell at the fastest rate since May 2009. Brazil too posted a modest decline for the second time in four months at 49.9 in April.
The survey further highlighted that the volume of new business across the sector rose marginally from March’s eight-month low. Backlogs of work fell for the fourth month running while a marginal cut in employment too was signalled. On inflation front, the survey noted that cost pressures remained subdued in April, as average input prices increased at the slowest rate since June 2013. Firms across emerging economies are not expecting any upturn about the year ahead, as the HSBC Emerging Markets Future Output Index which tracks firms' expectations for activity in 12 months' time fell to a new low in April mainly due to sharp weakening in output expectations in Brazil, Mexico and China. The HSBC survey expects that the prevailing slowdown in emerging market will continue to act as a dampener on global economic growth in coming months.