Sluggish BRIC manufacturing production hits world outlook
WEAK manufacturing output across the leading emerging markets in April has dented hopes of a healthy global recovery, studies revealed yesterday.
Factory activity deteriorated in China and Brazil, Markit’s purchasing managers’ indices (PMI) showed, although more solid growth was recorded in India and Russia.
Weak demand dragged down both output and new orders in Brazil for the first time this year, bringing the PMI down from 51.1 in March to 49.3 – a small decline, slightly below the “no change” level of 50.
Employment fell marginally as a result, ending three months of growth in headcount.
China’s manufacturers suffered their sixth consecutive monthly deterioration in conditions, with PMI edging up from 48.3 to 49.3, still below the “no change” level.
The continued decline pushed the employment index to a 37-month low, indicating uncertainty over the industry’s future.
Growth was recorded in India with a sturdy reading of 54.9, slightly up on March’s 54.7 as new orders accelerated.
However, capacity remains tight and the sector is being held back by power cuts which pushed up backlogs sharply.
Russia also reported an improvement in conditions, its manufacturing PMI rising from a stagnant 50.8 in March to 52.9 in April, its strongest performance in over a year.
However, economists warned yesterday that last month’s improvement in conditions is far from certain to last.
“In the uncertain global economic environment, downside risks to industrial growth in Russia still prevail,” warned HSBC economist Alexander Morozov.
Meanwhile South Korea’s manufacturing PMI also hit a one-year high and Turkey’s industry grew for the first time since January.