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Combined output slowed in India, one of the largest emerging economies

Growth in the emerging markets slowed in February to its lowest level for seven months, according to the HSBC Emerging Markets Index (EMI). The headline figure fell to 52.3* in February, from 53.8 in January.
HSBC's EMI is a monthly indicator that is derived from the HSBC Purchasing Managers' Indices that follow 16 key emerging economies.

Manufacturing rose at the slowest rate since November, while growth in the services sector dropped to a six-month low. Combined output slowed in China, India and Brazil, the largest of the emerging economies. However, in India there was accelerated growth in the manufacturing sector and purchasing activity grew at the fastest rate for 10 months.

All three countries reported weaker growth in the services sector. The rate of expansion in China's manufacturing sector eased in February. New orders rose for the fifth successive month, but at a modest pace. New export orders also increased fractionally.

Our hopes are mainly pinned on China, Asia and commodity producers in the
Middle East

Murat Ulgen,
HSBC Chief Economist, Central and Eastern Europe and Sub-Saharan Africa

In Brazil, manufacturers pointed to improved domestic conditions as the main spur to growth, although some companies benefited from a modest increase in new export orders.

Despite the slowdown, expectations for future output improved. The HSBC Emerging Markets Future Output Index, which tracks the expectations for business activity in 12 months, rose for the second consecutive month to its highest since May 2012. This was largely driven by improving sentiment in the manufacturing sector.

Murat Ulgen, HSBC Chief Economist, Central and Eastern Europe and Sub-Saharan Africa: said: "Expectations of 'future output' by emerging market businesses, specifically by manufacturers, improved sharply in February as a sign of strong sentiment. Our hopes are mainly pinned on China, Asia and commodity producers in the Middle East, as Latin America and Central and Eastern Europe, the Middle East and Africa are yet to show more convincing strength."

The HSBC EMI is calculated using the PMI ™ data produced by the global financial information services company Markit.

*This figure was later revised to 52.4

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.

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