The OECD composite leading indicators (CLIs), designed to anticipate fluctuations in economic activity over the next six to nine months, continue to point to a moderation in economic growth in several major economies, albeit to a different extent across countries.
Among the major OECD economies, the CLIs for Canada, Germany, Italy and the United Kingdom confirm having passed a turning point in economic activity, as flagged in last months’ assessment, and now point to moderating growth momentum. In the United States, Japan and the Euro Area as a whole, the CLIs have also passed a cyclical peak, but have since remained relatively stable. In France, the CLI points to stable growth around the long-term trend.
Among the major emerging-market economies, the CLI for China (industrial sector) continues to point to growth losing momentum, with similar indications now emerging for India and slowing growth continuing in Brazil. In Russia, the CLI now points to stable growth.
The CLIs, which are based on a range of forward-looking indicators such as order books, confidence indicators, building permits, long-term interest rates, new car registrations and many more, should continue to be interpreted with care as uncertainties from the ongoing COVID-19 pandemic persist, notably due to the impact of the Omicron variant in recent months. Variability in underlying indicators may result in higher than usual fluctuations in the CLI. As usual, the magnitude of the CLI should be regarded as an indication of the strength of the signal, rather than a precise measure of anticipated growth in economic activity