The HSBC Emerging Markets Future Output Index, which gauges sentiment in 16 main developing countries, rose for the first time in three months in May but remained weaker than the average level over 14 months of data collection, Markit and HSBC said in a statement.
They said improved sentiment was driven by the service sector, with expectations in the manufacturing sector the weakest in five months.
"The rise in the Future Output index, a new series tracking firms' expectations for activity in 12-months time, is good news," Andre Loes, HSBC chief economist for Latin America, said in the statement.
The highest sentiment was recorded in Indonesia, the United Arab Emirates, Saudi Arabia, Russia and Vietnam. The Czech Republic, South Korea, Taiwan, Egypt and Poland recorded the lowest.
Chinese business expectations weakened last month to the lowest this year. In Brazil, sentiment improved but remained below the levels seen in February and March.
In India, output expectations were relatively flat in May from April while Russian companies reported their best outlook since October last year.
Meanwhile the HSBC Emerging Markets Index, a monthly indicator derived from the PMI surveys and which indicates the pace of current growth in manufacturing and services in emerging markets, was unchanged at 51.4 in May from April, the lowest level since September 2011.
Growth slowed in China, Brazil and Russia but increased slightly in India on a stronger service sector.
New business growth slowed to the second-weakest level in four years while employment rose, albeit marginally.
"India has been the bright spot among the largest EM countries, while a combination of external headwinds and domestic issues has led to weakening growth in Brazil, China and Russia," said Loes.
Weak manufacturing and services meant weaker pricing power, he said, noting that input prices for service providers recorded the lowest rate of growth since June 2009 while output prices for both manufacturing and services fell for the second month in a row.
Chinese manufacturing output rose only marginally in May, while factory activity weakened throughout most of Asia.
In Latin America, business conditions in manufacturing continued to improve last month but at a weaker pace.
In Mexico, the rate of growth of new orders remained unchanged from the 20-month low it hit in April while in Brazil output rose at the slowest pace since October last year.
In Eastern Europe, Russian manufacturing was nearly unchanged in May while the Polish manufacturing sector remained in contraction for the 14th month in a row.
In Turkey, PMI data for May signaled stagnation in production, HSBC and Markit's statement said.
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