Emerging markets output growth slows to 4 month low: HSBC

Business activity across emerging markets expanded in January at the slowest pace in four

RELATED ARTICLES

months, dragged down by sluggish services sectors in the BRIC quartet of big developing countries, a survey showed on Monday.

HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys slipped for the second month running to 51.4 in January. It stayed under the 2013 average of 51.7 and well below the score of 64.1 posted last January.

But the monthly index remained above the 50 threshold which marks the difference between expansion and contraction.

Based on data from purchasing managers at about 8,000 firms in 17 countries, the survey showed signs of manufacturing and export revival in some countries but Chinese factory output fell below the 50 mark, Brazilian manufacturing growth slowed and output fell in Russia and Indonesia.

Growth was stronger in India, Poland, Taiwan and Mexico.

January services activity in the biggest emerging markets was at a six-month low. India and Brazil both posted declines, while growth rates in China and Russia were weak, HSBC said.

HSBC's global head of emerging markets research, Pablo Goldberg, said the data showed a clear divergence in recovery pattern between emerging economies.

"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," Goldberg said.

"By contrast, PMIs decelerated in Turkey, Brazil, Russia and Indonesia. These are among the countries where deteriorating external balances have prevented monetary easing or forced tightening."

Several emerging central banks such as Turkey, India, South Africa and Brazil have tightened monetary policy in recent weeks and many more are expected to follow suit, with severe consequences for economic growth.

While inflationary pressures were subdued, weak currencies were raising costs for some manufacturers, HSBC said. Turkish firms for instance saw the steepest rise in input prices in nearly three years, a result of the lira's fall to record lows.

The future output index, which tracks firms' expectations for activity in 12 months' time, picked up in January after falling in December to a six-month low.

But within this, manufacturing sentiment hit a ten-month high while that in the service sector fell to a record low.

The HSBC index is calculated using data produced by Markit.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The sudden rush of new papers could unsettle the secondary market

    While questions are being raised if the party has somewhat overextended on the Street, given the not-too-comforting macroeconomic numbers, retail inve

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Why manufacturing needs innovation

Prime minister Narendra Modi’s call of “come — make in ...

Kuruvilla Pandikattu SJ

Warren Buffett’s key to happiness

Despite being the second richest American, Warren Buffett still lives ...

Gautam Gupta

In fashion, why quality must exceed quantity

Every time there’s a fashion week in India, my friends, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture