Emerging markets' growth lacklustre, finds HSBC report

The EMI slipped to 53.0 in the second quarter of 2012, from 53.6 in the previous quarter. While the emerging markets reported a robust performance from the services sector, the growth was offset by very modest growth in the manufacturing sector, the report further showed.

Among the big-four emerging markets or BRIC nations (Brazil, Russia, India, China), a two-speed growth picture was evident as expansions were slower in Brazil and China compared with India and Russia.

Of the big-four emerging markets, service sector optimism was strongest in Brazil and India.

India and Russia also reported a rise in new expert orders as against a decline in orders to Brazil and China, according to the report.

The report blamed the limited growth in manufacturing segment on lacklustre demand from the Western economies.  

The manufacturing sector “remains the greatest drag on activity” said Murat Ulgen, chief economist for Central and Eastern Europe and sub-Saharan Africa at HSBC. The manufacturing segment still remains considerably below the pre-economic-crisis levels despite an improvement on the first quarter of 2012.

“Flat growth for new orders and a contraction in new export orders in manufacturing attest to the global economic challenges,” Ulgen added.