OREANDA-NEWS. February 17, 2014. The HSBC Emerging Markets Index fell for the second consecutive month in January. The index dropped to 51.4, from 51.6 in December, after a slower increase in output.  The reading is the lowest since September and below the 2013 average of 51.7.

Pablo Goldberg, Global Head of Emerging Markets Research, HSBC, said: “Although both the aggregate manufacturing and services EMI deteriorated in January, they remain in expansion territory. Interestingly the future activity index shows a pick-up for manufacturing and a drop for services, suggesting expectations of an export-led recovery.”

Manufacturing production increased. Slower expansion in China and Brazil and falling output in Russia and Indonesia were offset by stronger growth in Poland, India, Taiwan and Mexico.

Mr Goldberg added: “Manufacturing PMIs are still showing economic resilience, although not without increasing divergence between countries. Among the winners, we have countries in a clear cyclical recovery that are being lifted by the improvement in the developed markets: Mexico, Poland and the Czech Republic.”

Growth of services activity in the largest emerging markets slowed to a six-month low. India and Brazil posted declines while growth rates in China and Russia were weak.

New business growth was slower than the average for the final quarter of 2013. Backlogs of work declined marginally for the first time in four months and employment was broadly flat.

Input and output prices both increased at the slowest rates in six months.

The HSBC Emerging Markets Future Output Index, which measures firms’ expectations of activity in 12 months, picked up in January but was weaker than the average for 2013. Manufacturing sentiment hit a ten-month high, while the outlook in the service sector fell to a record low.

The EMI is derived from HSBC Purchasing Managers’ Index™ reports in 17 emerging economies. A reading above 50 signals growth; below 50 signals contraction.