Continued Recovery In The OECD

Indicators from the OECD continue to point to recovery in OECD economies. The composite leading indicators (CLI) for Canada, France, Italy, Germany and the UK all suggest more expansion in the business cycle than last month. In these OECD economies the main drivers of expansion are finance and business confidence. Non-member economies are also doing better with all major non-members in the recovery phase of the business cycle.

The CLI for OECD countries increased 1 point in October 2009 which is 5.7 points higher than the same period last year and the outlook is for recovery. The UK CLI increased by 1.3 points in October which was 8.8 points higher than last year and the outlook is expansion. The Euro area increased by 1.3 points, 8.8 points higher than last year. The US CLI increased 1 point, 3.9 points higher than last year. France was 10.2 points up on last year, Germany 9.2 and Italy 12.5 points up on last year.

Among the non-members China's CLI had increased 0.2 points in October and 5.7 points on last year, India 0.2 and 4 respectively, Russia increased 1.6 points in the month but was 1.1 points lower over the year and Brazil had increased by 0.7 points in October and decreased 4.2 points since October 2008.

The outlook for the OECD economies is one of recovery and for the Euro area expansion. The economies of Canada, France, Germany and Italy are also expected to expand and G7 and Asian economies are expected to be in the recovery phase as are the major non-member economies. It should also be noted that any signs of recovery contained in the data are more concerned with recovery happening rather than any suggestion of the strength of the recovery.