Emerging markets’ business output slips for fourth consecutive month in March: HSBC

Emerging markets’ business output slips for fourth consecutive month in March: HSBCSluggish demand and political uncertainty continues to keep business activity across emerging markets under pressure, HSBC's composite emerging markets index (EMI) revealed.

HSBC's composite EMI of manufacturing & services purchasing managers' survey tumbled from 51.1 in February to 50.3 in March. It was the fourth monthly decline in business activity across emerging markets in a row.

It may be noted here that a reading of below 50 represents contraction in an economic sector, while a reading of above 50 stands for expansion.

The index is well below the last year's average reading of 51.7. The regional business activity is under pressure mainly due to output contraction in three big economies, viz. China, India and Russia.

China suffered a decline in its business activity for the second consecutive month in March, while India's business activity slipping back into contraction. Russia's business output slipped the most since May 2009.

Frederic Neumann, co-head of Asian economic research at HSBC, said, "Emerging markets are going through a rough patch. Lacklustre demand in advanced markets has so far restrained exports. Political uncertainty locally may also be to blame."

While Brazil, Russia, India and China reported the lowest business expectations in manufacturing in March; the Czech Republic, Vietnam and Poland displayed the strongest sentiment.

The report is based on data from purchasing managers at nearly 8,000 companies in seventeen countries.