One of our most reliable indicators about emerging markets shows that investors may have a real slog ahead of them in the coming years. In the past, we’ve used cell-phone sales in growing economies as means of measuring the prospects for investments. Cell phones show how much disposable income is available, in addition to reflecting the entrepreneurial spirit that creates a healthy middle class.

These countries whose communications systems have suffered from decades of neglect and under-investment could never match the needs of a fast-growing economy. So rather than wait for the government to lay cables, consumers instead opt for instant communications via cell phones.

Now a new report from market-research firm Gartner, Inc. says that cell-phone sales in emerging markets will hit a wall. Investors should take this information to mean that these markets will continue to be soft through 2009.

In Q3 2008, about 309 million mobile phones were sold world-wide, Gartner said – a 6% rise from a year earlier, but a sharp drop from the 16% year-to-year growth seen in the Q3 2007.

The Asia-Pacific region, once a hotbed of cell-phone sales, is expected to stop dead in its tracks, according to Gartner.

This is in stark contrast to earlier numbers from Gartner, which showed that Q1 2008 Asian cell-phone sales jumped 26.6% from the same quarter in 2007, driven by demand in India and South Korea.

What does this mean in terms of economic growth?

Research shows that greater cell-phone usage can stimulate economic growth in emerging economies. Based on market research in China, India and the Philippines, consulting firm McKinsey & Co. found that raising wireless penetration by 10 percentage points can lead to an increase in gross domestic product of about 0.5%, or around $12 billion for an economy the size of China.

So armed with this new data, we recommend that investors say clear of emerging markets at through Q2 2009 or maybe longer.

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