Emerging markets' output growth rose to a 5-month high in February, and manufacturing as well as services sector in India expanded at a faster pace than China during the month, an HSBC survey said today.
The HSBC Emerging Markets Index (EMI), a monthly indicator derived from Purchasing Managers' Index surveys, rose to 51.9, from 51.2 in January, signalling fastest rate of expansion since last September, but still lagging the developed economies.
"February saw some welcome signs of renewed life across the emerging markets," Markit Chief Economist Chris Williamson said, adding that "emerging markets collectively continued to significantly underperform against the developed world".
In contrast, Russian private sector output declined at the strongest rate since May 2009. During February, the HSBC composite index for India, which maps both manufacturing and services, stood at 53.5, whereas for China it was 51.8, Brazil (51.3) and Russia (44.7). An index measure of above 50 indicates expansion.
"Although weak, the expansions in China, India and Brazil contrasted with the steepening downturn recorded in Russia, which is suffering the worst performance of all major economies so far this year," Williamson said. Stronger output growth was driven by a sharper increase in new business, and also a slight decline in outstanding workloads. Marginal employment growth was registered for the third successive month. Going forward, the outlook for global emerging markets strengthened for the coming months. The HSBC Emerging Markets Future Output Index, which tracks firms' expectations for activity in 12 months' time, improved to an eight-month high. The index showed that sentiment has strengthened both for manufacturing and services.
By country, China and Brazil registered brighter output expectations, while sentiment in Russia remained weak.