Economic activity in the emerging market increased at the slowest pace in six months in February as both the manufacturing sector and the service sector recorded slower growths, data from a survey by HSBC Bank and Markit Economics showed Wednesday.
The seasonally adjusted Emerging Markets Index dropped to 52.3 in February from 53.8 in January, hitting the lowest level since August 2012. An index reading above 50 indicates expansion, while one below suggests decline.
The deceleration of overall growth reflects broad-based slowdown across service providers and manufacturers. Goods production rose at the slowest rate since November, while services activity growth eased to a six-month low.
New business received by firms in emerging markets increased at the slowest pace in six months in February, with all BRIC economies registering slower increases in orders. At the same time, employment increased at the weakest rate in three months.
The average input price inflation faced by private sector firms in emerging markets accelerated to a ten-month high in February, with both manufacturing and services firms recording broadly similar increases. Output prices increased for the sixth successive month, though at a modest rate.
The forward-looking sub-index, which tracks firms' expectations for activity in the next twelve months, increased for the second consecutive month in February to hit the highest level since May last year, mainly due to improving sentiment in the manufacturing sector. Business expectations at service providers were the strongest in three months.
"A pickup in external headwinds suggests concerns might move from inflation to growth," Emerging Markets Research Global Head Pablo Goldberg said. "The emerging world needs China to keep a strong pace of expansion."
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