Hong Kong: Business sentiment in so-called Bric economies—Brazil, Russia, India and China—has plunged as the global financial crisis takes its toll, a survey by audit and consultancy firm KPMG showed.
Manufacturers in Russia were more optimistic than their peers in the other Bric economies, while companies in Brazil were most pessimistic.
Overall, the survey reading of business confidence in Bric nations came in at +3.5, plummeting from +47 in a previous survey last summer. The latest reading was boosted by relative optimism among Russian firms. Russia’s score was 21.2, down from 63.2 in the previous survey, while Brazil’s was -3, against +65.3 six months ago. China’s score was +2.6, down from 36.3, while India’s was -1.6, reversing a +62.9 reading in the last survey.
“So much for decoupling,” Ian Gomes, chairman of KPMG’s emerging markets practice, said. “The collapse in confidence among Bric manufacturers underscores the vulnerability of emerging markets to the global economic crisis and consequent drop in external demand.” The scores indicate firms’ degree of optimism or pessimism on the outlook and can vary between -100 and +100. A zero score signals a neutral outlook for the next 12 months, while a score above zero signals optimism.
The twice-yearly survey, produced by UK-based Markit Economics for KPMG, covers around 1,800 companies in manufacturing across the four emerging economies.