LONDON, Sept 5 Business activity across emerging
economies edged back into expansionary territory in August,
staying relatively subdued, though expectations rose to a
five-month high, a survey showed on Thursday.
The composite HSBC Emerging Markets index for services and
manufacturing rose to 50.7 in August from 49.5 in July, when it
dipped below the 50 mark that separates growth from contraction
for the first time in four years.
But August's reading was the third-lowest in more than four
years. Manufacturing output was flat and growth in services
activity remained weak, HSBC said.
China and Russia recorded mild increases in output following
declines in July. Brazil suffered a slight drop, while India
posted the steepest rate of decline since March 2009.
The HSBC Emerging Markets Future Output Index, measuring
business expectations, rose for the second month running to its
highest since March, though it remained below its historic
17-month trend level. Among the BRIC economies, sentiment was
strongest in Brazil and weakest in China.
"Emerging economies are still faced with headwinds, which is
evident in weak export orders, despite signs of life in the
industrialised world," said Murat Ulgen, HSBC's chief economist
for central Europe and sub-Saharan Africa, in a statement.
Ulgen added that China, the world's second-largest economy,
expanded last month, but large emerging economies like Brazil,
India, Indonesia and Turkey were suffering from "supply-side
problems, owing to low domestic savings, infrastructure
bottlenecks and loss of competitiveness with rising unit labour
Emerging Europe, however, is benefiting from a brighter
outlook for the euro zone.
The Czech Republic posted a sharp rise in new orders,
boosted by new export business. Polish manufacturing output, new
orders, new export business and purchasing activity all grew at
faster rates in August, and employment increased for the first
time in 12 months.
"Central Europe is piggybacking on the euro zone recovery,
looking better in comparison," Ulgen said.
The HSBC survey collects data from purchasing managers at
about 7,500 firms in 16 emerging markets. The index is
calculated using data produced by Markit.