* HSBC Brazil Manufacturing PMI falls to 49.3 from 50.4
* Output, new orders retreat, finished stocks rise
By Asher Levine
SAO PAULO, May 2 (Reuters) - Brazil's manufacturing activity shrank in April, ending a four-month run of meager expansion, as new orders and output cooled, a private survey showed on Friday.
The HSBC Purchasing Managers' Index for the Brazilian manufacturing sector fell to a seasonally adjusted 49.3 in April from 50.6 in March. The 50 mark separates contraction from expansion.
The new orders index fell to 48.7, dropping to its lowest level since July and retreating further from an 11-month high of 52.4 in January. The drop in new work was mostly due to weaker demand, more difficult economic conditions and tougher competition, the survey showed.
Output shrank for the first time since August 2013, with the decline hitting consumer, intermediate and capital goods alike.
Stocks of finished goods expanded for the first time since March 2013 due to weaker demand, the survey showed.
High labor costs, poor infrastructure and a hefty tax burden still weigh heavily on Brazil's manufacturers, whose lackluster performance has weighed on economic growth.
Brazilian industrial production is expected to expand just 1.4 percent this year, according to a central bank poll released Monday. Economists in the poll predict economic growth of 1.65 percent in 2014.
"The decline of the HSBC Brazil Manufacturing PMI to 49.3 in April and the softening of the majority of its components suggest that the Brazilian economy is losing momentum," said Andre Loes, chief Brazil economist at HSBC. (Reporting by Asher Levine; Editing by Chizu Nomiyama)