April data indicated falling output in the four largest emerging economies. Overall business activity across the Chinese manufacturing and services sectors declined slightly for the third month running, the longest sequence of contraction in over five years. Meanwhile, private sector output in Russia fell at the fastest rate since May 2009. Indian business activity fell for the ninth time in ten months, albeit marginally, while Brazil posted a fractional decline for the second time in four months.
Manufacturing output across emerging markets was broadly stagnant in April, while services activity growth was unchanged from March's weak rate. The volume of new business across both sectors rose at a rate little changed from March's eight-month low. Backlogs of work fell for the fourth month running while a marginal cut in employment was signalled.
Factories across India continued to report improving operating conditions in April. That said, growth of both production and new orders moderated. Meanwhile, manufacturing sentiment in China and India remained relatively subdued.
Cost pressures remained subdued in April, as average input prices increased at the slowest rate since June 2013. Manufacturing input prices continued to fall in China, South Korea and Poland, while Russia and Turkey continued to post the sharpest rates of inflation.
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 reflecting a sharp weakening in output expectations in Brazil and Mexico and the weakest sentiment in China in 2014 so far.
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