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EMI weakest in four months (Getty Images/James Lauritz)

The EMI reading is the lowest since September and below the 2013 average of 51.7

The HSBC Emerging Markets Index fell for the second consecutive month in January. The index dropped to 51.4, from 51.6 in December, after a slower increase in output.  The reading is the lowest since September and below the 2013 average of 51.7.

Pablo Goldberg, Global Head of Emerging Markets Research, HSBC, said: “Although both the aggregate manufacturing and services EMI deteriorated in January, they remain in expansion territory. Interestingly the future activity index shows a pick-up for manufacturing and a drop for services, suggesting expectations of an export-led recovery.”

Although both the aggregate manufacturing and services EMI deteriorated in January, they remain in expansion territory

Pablo Goldberg,
Global Head of Emerging Markets Research, HSBC

Regional view

  • “The oil-rich Gulf continues to shrug off broader EM weakness; for Egypt the road to recovery is a long and difficult one”
    Simon Williams
    HSBC Chief Economist, MENA
  • “China’s export engine not firing up, but Taiwan is flying thanks to electronics. Encouraging bounce in Indonesia”
    Frederic Neumann
    Co-Head of Asian Economic Research, HSBC
  • “Mexican industry with solid acceleration at year start, while Brazil slows down, with contraction of its vast services sector”
    Andre Loes
    HSBC Chief Economist, Latin America
  • “Central and Eastern Europe leads the way with further improvement in manufacturing production. The rest of the region shows soft, if not weak performance”
    Murat Ulgen
    HSBC Chief Economist, CEE and sub-Saharan Africa

Manufacturing production increased. Slower expansion in China and Brazil and falling output in Russia and Indonesia were offset by stronger growth in Poland, India, Taiwan and Mexico.

Mr Goldberg added: “Manufacturing PMIs are still showing economic resilience, although not without increasing divergence between countries. Among the winners, we have countries in a clear cyclical recovery that are being lifted by the improvement in the developed markets: Mexico, Poland and the Czech Republic.” 

Growth of services activity in the largest emerging markets slowed to a six-month low. India and Brazil posted declines while growth rates in China and Russia were weak.

New business growth was slower than the average for the final quarter of 2013. Backlogs of work declined marginally for the first time in four months and employment was broadly flat.

Input and output prices both increased at the slowest rates in six months.

The HSBC Emerging Markets Future Output Index, which measures firms’ expectations of activity in 12 months, picked up in January but was weaker than the average for 2013. Manufacturing sentiment hit a ten-month high, while the outlook in the service sector fell to a record low.

The EMI is derived from HSBC Purchasing Managers’ Index™ reports in 17 emerging economies. A reading above 50 signals growth; below 50 signals contraction.

The intellectual property rights to the HSBC Emerging Markets Index provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit's prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information ("data") contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under licence. Markit and the Markit logo are registered trade marks of Markit Group Limited.

Read the February 2014 HSBC EMI press release

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