February saw an increase in output for emerging market as rate of growth as measured by Emerging Market Index (EMI) strengthened to a five-month high of 51.9.
The EMI is derived from HSBC Purchasing Managers’ Index reports in 17 emerging economies. A reading above 50 signals growth, while below 50 signals contraction.
Three of the four largest emerging market economies—India, Brazil and China—registered higher output in February with the private sector in Russia declining at the strongest rate since May 2009. Although the recent level of EMI remained well below the long-run tend level of 53.7, India recorded the strongest rate of expansion, followed by China where growth picked up to a five-month high. In Brazil, private sector business activity rose for the first time in five months.
Chris Williamson, chief economist at Markit, said, “February saw some welcome signs of renewed life across the emerging markets as a whole, albeit qualified by growing concerns over the plight of Russia as its downturn deepens.”
“However, despite seeing the fastest growth for five months, emerging markets collectively continued to significantly under-perform against the developed world, sustaining the trend that has been evident over the past two years and therefore once again acting as a material drag on global economic growth,” he added.
The report shows brighter future for emerging markets as firms’ expectations for activity in an year’s time, tracked by HSBC Emerging Markets Future Output Index, improved to an eight-month high. China and Brazil registered brighter output expectations while sentiment in Russia remained weak as global sanctions and continued conflict in Ukraine weigh down on Russian economy.
The JPMorgan Global All-Industry Output Index, which is produced by JPMorgan and Markit in association with ISM and IFPSM, posted 53.9 in February, up from 53.0 in January, signaling an expansion for 29 consecutive months. The Global Report on Manufacturing & Services is compiled by Markit based on the results of surveys covering over 16,000 purchasing executives in 32 countries which constitute 86 per cent of the world GDP.
(Edited by Joby Puthuparampil Johnson)
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