Emerging markets set to lead global economic recovery, says HSBC index

Notes and media contacts

HSBC Holdings plc
HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 8,500 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,422 billion at 30 June 2009, HSBC is one of the world's largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.

What are Purchasing Managers' Indices?
Purchasing Managers' Indices (or PMIs) are monthly surveys of carefully selected companies which provide an advance indication of what is really happening in the private sector economy by tracking variables such as business activity, new orders, employment and prices across all sectors of the economy. PMIs, which are essentially headline figures from the surveys, are a weighted combination of survey variables designed to provide an overall view of business conditions.

The PMI surveys are based on fact, not opinion, and are the first indicators of economic conditions published each month. The data are collected using identical methods in all countries so that international comparisons may be made between, for example, the US ISM non-manufacturing PMI and the Eurozone services PMI, or similarly between the Indian and UK service sector PMI monthly reports.

These surveys are the most closely watched in the world and are essential must-have data for economic analysts, financial market players and other decision makers that require early indicators of changing market conditions (such as central banks) when setting interest rates.

About the HSBC EMI
The HSBC EMI is a quarterly survey, based on data compiled from monthly replies to Purchasing Managers' Index (PMI) surveys at manufacturers and service providers in emerging markets including the increasingly important BRIC economies of Brazil, Russia, India and China.

These survey panels are stratified geographically and by Standard Industrial Classification (SIC) group, based on the regional, and industry contribution to GDP.

Survey responses reflect the change, if any, in the current month compared to the previous months based data collected mid-month. For each of the indicators the "Report" shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses and the "diffusion index."

The index is the sum of the positive responses plus half of those responding "the same." Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50% indicates an overall increase in that variable, below 50% an overall decrease. All data are seasonally adjusted.

Data collected at the national level for manufacturing and services are then weighted according to relative contributions to national and regional GDP to provide indicators at the whole economy or emerging market level.

About HSBC's data provider: Markit Economics
Markit Economics is a specialist compiler of business surveys and economic indices, including the new HSBC Emerging Markets Index (EMI) - part of the established Purchasing Managers' Index (PMI) series, which is now available for 26 countries and key regions including the Eurozone and BRIC. The PMIs have become the most closely watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends.
For further information please contact:
HSBC
Media enquiries to Andrea Jaishankar, Manager Communications, HSBC Bank Middle East Limited on 04 4235635