The HSBC Emerging Markets Index (EMI), a monthly indicator derived from Purchasing Managers' Index surveys, compiled by Markit, rose to a 17 month high of 52.5 in August, up from 51.7 in July, signalling stronger growth of output across global emerging markets.
"The pace of economic growth in emerging markets continued to revive from the stagnation seen earlier in the year. August saw the fastest pace of expansion for 17 months, buoyed by growth moving up a gear in China's services economy," Markit Chief Economist Chris Williamson said.
Among the largest emerging markets, China posted the fastest growth since March 2013. Output in Russia and India rose at weak rates, while a marginal contraction was signalled for the fifth month running in Brazil.
During August, the HSBC composite index for India, which maps both manufacturing and services, stood at 51.6, whereas for China it was 52.8, Brazil (49.6) and Russia (51.1). An index measure of above 50 indicates expansion.
"Growth was also recorded in India, albeit with the pace of expansion moderating. However, the renewed growth trend in recent months represents a welcome improvement from the prior downturn," Williamson said.
Service sector output in emerging markets rose at a stronger rate in August, with growth almost matching June's 15-month high, while manufacturing output rose at a rate unchanged from July's eight-month high.
Meanwhile, the outlook for global emerging markets continued to deteriorate, as per the report. The HSBC Emerging Markets Future Output Index, that tracks firms' expectations for activity in 12 months' time fell to the second-lowest level since the series started in April 2012.
"Growth in Asia remains below potential. Weak manufacturing requires more policy support and may impede the progress of structural reforms," HSBC Co-Head of Asian Economic Research Frederic Neumann said.