Manufacturing activity in emerging markets fell to a new post-financial crisis low in July as output contracted across its four largest economies for the first time since March 2009, according to HSBC.
The HSBC Emerging Markets Index (EMI), a monthly indicator derived from purchasing managers surveys (PMI), fell to a low of 49.4 in July, down from 50.6 in June. This marks the first time the reading below the 50 level, which separates growth from contraction, since April 2009.
Added to that, Brazil, Russia, India and China (BRICs) all saw the first broad-based contraction in factory output in over four years.
Frederic Neumann, co-head of Asian economic research at HSBC said that emerging markets are not yet feeling a lift from stabilizing demand in developed economies of the U.S., Europe and Japan.
"For example, manufacturers have seen new export orders contract for a fourth consecutive month in July," Neumann said in a note on Tuesday, adding that there are signs that domestic headwinds for emerging markets' growth are "stiffening" as well.
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"Total new manufacturing orders fell sharply last month, while new orders for services continue to expand at a disappointing pace," Neumann said.