The services and manufacturing activities across emerging markets during June expanded at their fastest rate since March 2013. The HSBC Composite Emerging Markets Index, based on the survey of around 8,000 firms in 17 countries, rose to 52.3 in June from 50.6 recorded in May boosted by strong growth in China and India. Services activity growth in emerging economies hit a 15-month high level in June.
The survey highlighted that the pick-up in output growth was reflected in both manufacturing and services and three of the four largest emerging markets contributed to the faster overall rise in output in June. India saw the steepest expansion since February 2013 while, China posted the sharpest increase in output for 15 months. Brazil, however, registered a flat trend in activity whereas Russian private sector output stabilised, after falling at the strongest rate in five years, in May.
The HSBC survey further highlighted that the volume of new businesses across the sector rose at fastest pace since March 2013. Referring to inflationary pressures, the survey noted that despite input price inflation reaching a four-month high, prices charged for finished goods and services increased fractionally in the reported month June. The HSBC Emerging Markets Future Output Index which tracks firms' expectations for activity in 12 months, indicated strengthening of sentiment across emerging markets for the first time since February. India registered the brightest outlook for the third successive month, ahead of Brazil and China. On the other hand, Russian business expectations were the third-weakest in the 27-month series history.
On the global front, the survey stated that currently global economic growth is driven only by developed world. However, emerging economies showed signs of recovery and if momentum can build in coming months, improvements in the emerging markets will help lift global growth.