Output falls in China, India and Russia
The HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, fell for the fourth month running to 50.3 in March, from 51.1 in February, indicating only a marginal increase in private sector output across global emerging markets.Notably, output contracted since February in three of the four largest emerging economies. China posted a marginal decline for the second month running, while India slipped back into contraction. Meanwhile, Russian private sector output fell at the fastest rate since May 2009.
Emerging market manufacturing output fell for the first time in eight months in March, albeit marginally. Meanwhile services activity rose at the weakest rate since July 2013. A faster increase in Chinese service sector activity was offset by declines in Russia and India.
New business growth across global emerging markets eased to a fractional pace in March, and backlogs of work continued to decline. Subsequently, employment growth remained weak.
Input price inflation in emerging markets hit a nine month low in March. Russia bucked this downward trend, seeing the strongest rise in input prices in three years - mainly due to the weakening ruble. In contrast, China posted a fall in average input prices for the third month running.
The HSBC Emerging Markets Future Output Index tracks firms' expectations for activity in 12 months' time. The index fell back in March from February's 11-month high, but was still the second-highest in the past seven months. Manufacturing output expectations weakened while services sentiment improved.
Manufacturing production growth across India eased from February's one-year high and was modest overall. While firms reported higher incoming new work, there was evidence that competitive pressures and shortages of some raw materials hampered growth. Similarly, new orders rose at a weaker clip in March.
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The BRIC group of emerging economies registered the lowest manufacturing output expectations in March with Russia showing the worst outlook overall (and a series record low), followed by China, Brazil and India respectively. Manufacturers in Indonesia and Vietnam continued to exhibit the strongest sentiment, followed by those in the Czech Republic and Poland.
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