LONDON (Reuters) - Business activity in emerging markets expanded at the fastest rate in three months in May, although growth was weak compared with developed markets and an index of future expectations hit a new low, a survey showed on Friday.
HSBC’s composite emerging markets index of manufacturing and services purchasing managers’ surveys rose to 50.6 in May from 50.4 in April, but remained well below its long-run trend level of 53.8.
Manufacturing output rose for the first time in three months, though at a weak rate, the data showed. In the services sector, activity increased at the slowest rate since last July.
“The reading of 50.6 in May compares with a developed world PMI equivalent of 55.4. While the former points to an ongoing languor that has plagued the emerging markets over the past year, the developed world has moved into a higher gear and is now enjoying its strongest growth for just over three years,” Chris Williamson, chief economist at Markit, said in a statement.
The HSBC index is calculated using data produced by Markit,from purchasing managers at about 8,000 firms in 17 countries.
Among the BRIC emerging markets, China showed a slight increase in growth for the first time in four months while India posted its largest rise since June 2013.
Narendra Modi’s pro-business BJP party won overwhelmingly in Indian elections in May, propelling Indian stock markets to record highs.
Russia, which has suffered some western sanctions following the conflict in Ukraine, saw output fall at its fastest rate since May 2009. Brazilian output was flat.
The future output index, which tracks firms’ expectations for activity in 12 months’ time, tumbled to a new low in May.
Brazil, which hosts the soccer World Cup this month and faces presidential elections later this year, reported the weakest output expectations among the BRIC economies. China’s future output index hit a new low for the 26 months of data collection for the series.
Reporting by Carolyn Cohn; Editing by Hugh Lawson