Emerging markets are likely to lead the global economic recovery, suggests a new survey from HSBC.

Launched Tuesday, the HSBC Emerging Markets Index is compiled with data from over 5,000 purchasing managers from companies in 13 countries,

The new index shows that emerging markets output in the third quarter recorded a robust rise and that forward indicators point to further improvement in the fourth quarter.

“As the world’s economic centre of gravity shifts from West to East, the economic strength of emerging markets will play an increasingly central role in the development of financial markets and international relations. The HSBC Emerging Markets Index provides a unique snapshot of the economic heartbeat of emerging markets,” says Stephen Green, Group Chairman of HSBC Holdings plc

The index surged from 50.7 in Q2 to 55.3 in Q3, signalling the strongest quarterly increase in emerging market manufacturing and service output since Q2 of last year. The index has rebounded sharply from an all-time low of 43.8 recorded in the final quarter of last year and 44.3 in Q1. Any reading below 50 indicates a contraction of output during the quarter while readings above 50 signal expansion.

“Although the U.S. remains the most important trading partner for many emerging nations, its relative importance is declining. We now expect emerging nations to see economic growth of 6% next year while the developed world will expand by only 1.8%,” says Stephen King, HSBC’s chief economist.

The HSBC EMI will be released quarterly and is available via: www.hsbc.com/emergingmarketsindex.

The next Emerging Markets Index will be released Jan. 7, 2010.

IE