LONDON, March 6 Growth across emerging markets
including China and India slowed in February, according to a
monthly purchasing managers' index, which hit its lowest level
India, Brazil and China all saw growth rates decline after a
strong increase in January, according to the HSBC Emerging
Market Index, published on Wednesday. The slowdown was evident
in both manufacturing and services.
Investors are eyeing closely whether emerging markets can
continue to grow despite strong headwinds from a slow global
recovery, with particular concern surrounding a possible
slowdown in the Chinese economy.
The HSBC PMI index, based on purchasing managers' surveys of
16 emerging economies, fell to 52.3 from 53.8 in January but
remained above the crucial 50 level which signifies overall
"The slowdown appears to be broad-based across manufacturing
and services, with BRIC activity moderating after a promising
start to the new year," said Murat Ulgen, chief economist at
New orders slowed to their lowest rate in six months, while
employment growth slipped to a three-month low.
Despite slowing growth, expectations among firms for output
over the next 12 months hit its highest since May 2012,
according to an index measuring business sentiment compiled by
Business expectations in China, the world's second-largest
economy, perked up, with sentiment reaching its most positive
since April 2012.
Ulgen said he saw two possible paths ahead for emerging
"Either the emerging markets will wobble along, buffeted by
worries in the developed world," he said.
"Alternatively, the current slowdown will prove temporary,
as the inventory cycle works its way through and improved
underlying fundamentals bring back the days of strong growth."
Ulgen said he leant towards the second theory, pointing to
strong sentiment towards future output.
"Our hopes are mainly pinned on China, Asia and commodity
producers in the Middle East, as Latin America and central and
Eastern Europe are yet to show more convincing strength," he
Mexico, whose manufacturing revival has been lauded by
investors, saw the slowest rate of manufacturing growth in over
a year, with growth in output and new orders both dropping off.
"The emerging world needs China to keep a strong pace of
expansion," said Pablo Goldberg, global head of emerging markets
research at HSBC.
(Reporting by Stephen Eisenhammer and Sujata Rao; Editing by