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Emerging markets output expands at strongest pace in August: HSBC Survey

05 Sep 2014 Evaluate

Signalling stronger growth of output across global emerging markets, services and manufacturing activities across emerging markets expanded at a stronger pace in August. The HSBC Composite Emerging Markets Index, based on the survey of around 8,000 firms in 19 countries, rose to a 17 month high of 52.5 in August, up from 51.7 in July. The pace of economic growth in emerging markets continued to revive from the stagnation seen earlier in the year and the fastest pace of expansion in the month of August was buoyed by strongest growth in China's services economy. However, India registered low growth in manufacturing as well as services sectors in comparison to China.

Among the largest emerging markets, China posted the fastest growth since March 2013 with HSBC Composite Output Index increasing to 52.8 in August from 51.6 in the previous month. Meanwhile, output in Russia and India rose at weak rates, while a marginal contraction was signaled for the fifth month running in Brazil. During August, the HSBC composite index, which maps both manufacturing and services, for India stood at 51.6, for Brazil (49.6) and Russia (51.1). An index value above 50 mark indicates expansion. In emerging markets, service sector output rose at a stronger rate in August whereas manufacturing output rose at same rate recorded in the previous month July.

The HSBC survey further indicated that new business growth regained momentum and grew at fastest pace in nearly one and half years. Backlogs of work continued to decline marginally, signalling spare capacity and employment was broadly stable, in line with the underlying trend witnessing from past one and half years. On inflation front, the survey highlighted that input price inflation reached a three-month low in August on account of weaker rise in manufacturing input prices. Regarding the business expectation, the survey noted that the outlook for global emerging markets continued to deteriorate in August. The HSBC Emerging Markets Future Output Index tracks firms’ expectations for activity in 12 months’ time, fell in August to the second-lowest level since the series started in April 2012, almost matching May’s record low.
 


 

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