Indicating that economic growth in emerging countries continues to revive, the services and manufacturing activities across emerging markets touched an 18-month high level during September. The HSBC Composite Emerging Markets Index, based on the survey of around 8,000 firms in 17 countries, rose to 52.5 in September, up from 52.4 in August. Moreover, on a quarterly basis the EMI averaged 52.2 in Q3, the best since the Q1 of 2013.
The HSBC survey highlighted that services activity rose at a stronger rate than manufacturing output for the second month running. The significant output growth was mainly driven by strongest growth in China's services economy as services activity in Brazil, India and Russia rose at either weak or marginal rates. However, the survey highlighted that the manufacturing and services sectors in India expanded at a slower pace as compared to China in September. In Brazil, business conditions improved, albeit marginally, for the first time in six months in September, with an upturn in new orders paving the way for a further upturn in the fourth quarter. While, Russia continued to eke out marginal growth in September, however, the inflows of new business slow to near stagnation.
The survey further indicated that new business growth remained close to June’s 15-month peak, but remained slower than the average over the nine-year series history. Thus, outstanding work declined slightly for the third month running and employment level remained broadly unchanged. On inflation front, the survey indicated that input price inflation slowed further to a 15-month low in September and manufacturing continued to record weaker cost pressures than services. Regarding the business expectation, the survey noted that, the outlook for global emerging markets remained relatively weak in September. The HSBC Emerging Markets Future Output Index tracks firms’ expectations for activity in 12 months’ time, and was little-changed from August’s three-month low in September.