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The HSBC EMI provides emerging market intelligence on Markit PMI data.

The HSBC emerging markets index (EMI) is not as weak as it was during the 2008/09 financial crisis but it has nevertheless softened yet again, reaching a nine-quarter low in the third quarter of 2011. The main culprit is manufacturing where the latest reading points to an outright contraction. Services are still expanding, but at a much-reduced rate. The level of activity is now worryingly soft.

Key findings include:

• Activity growth eases for third quarter in a row. Manufacturing output falls
• New business increases at slowest rate for nine quarters in Q3 2011
• Marginal backlog depletion recorded across both manufacturing and services
• Job creation slows to marginal pace, as manufacturing employment stagnates
• Further easing of input cost inflation across the emerging world in Q3 2011
• Emerging market companies’ pricing power weakens
• New export business down for first time since Q2 2009
• Growth of purchasing activity slows to near-stagnation
• Further depletion of finished goods holdings at emerging market manufacturers
• Input stocks fall at accelerated pace in Q3
• Lead times lengthen at the slowest rate since Q3 2009
• Service sector business optimism dips to three-quarter low

To compare Q3's performance with Q2 2011, download the HSBC Emerging Markets Index: Q2 2011 here.

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