Composite Leading Indicators Suggest Stable Growth In The OECD

The OECD Composite Leading Indicators (CLIs) continue to suggest stable growth momentum in the OECD. CLIs are designed to anticipate turning points in economic activity relative to trend.

The US, Canada and the UK CLIs show stable growth momentum and in the UK growth is stabilising at rates above the trend. The CLI for Japan shows an interruption in the growth momentum although it is probably only a temporary effect. The CLIs for the euro area as a whole and for Italy in particular indicate a positive change in momentum. Germany may be losing some of its momentum but it is at a high level.

In the BRICS emerging economies, Brazil's CLI points to below trend growth, China and Russia are growing around the trend and India may be returning to faster growth with a CLI suggesting a positive turning point.

International Merchandise Trade Slow Again

Most of the major economies experienced a continuation of the slowdown in merchandise trade seen in the second quarter in the third quarter of 2012 according to data from the OECD. Imports and exports fell in Brazil, Germany, Italy, Japan, Russia, S.Africa and the US. Imports also decreased in France and the UK. Moderate export growth occurred in France and the UK. Exports fell in Canada, China and India. Imports grew moderately in Canada and China but there was stronger growth in India.

OECD Leading Indicators Suggest A Potential Turning Point

Composite leading indicators from the OECD, designed to anticipate economic turning points relative to trend, show signs of regained momentum in economic activity in Japan and the United States. The Euro Area also shows signs of a potential turning point. The major European economies have, however, diverging assessments. The emerging BRICS economies show stronger positive signals than the last assessment.

OECD CLI Suggest Slow Down In Recovery

The Composite Leading Indicators (CLIs) published by the OECD for April 2011 suggest a slight loss of momentum in most major economies with the US the exception. Stability in the pace of expansion was suggested in Germany and the UK but France, Italy and Canada show signs of a slowdown. Signs of a slowdown also appear in China, Brazil, India and Russia.

OECD CLIs Show Signs Of Expansion

The composite leading indicators of the OECD countries for February 2011 signify continued expansion in the economies of most member countries. The OECD area annual growth rate was 1.8% compared with the Euro area 1%. The trend of expansion is continuing in Germany and the United States. The rate of expansion seems to be slower but stable in the UK. France and Canada are possibly regaining momentum but Italy may be losing momentum.

Russia seems to be continuing its current economic expansion phase while China shows signs of more moderate economic activity. India is pointing towards a slowdown but Brazil should remain near its long-term potential. The Major 5 Asian economies grew by 0.2% over the last year and the Major 7 by 2.1%.

CLI Shows Signs Of A Peak In US Economy

The OECD composite leading indicators for August suggest that economic expansion is continuing to slow down. The CLI decreased by 0.1 point in August for the fourth month in a row. A downturn is expected in Canada, France, UK, Italy, Brazil, India and China. Expansion is indicated for Germany, Japan and Russia. The US is showing signs of a peak in economic activity.

Moderate Growth Expected In OECD

The latest OECD composite leading indicators statistics signify a moderation in the rate of expansion compared to last month. The index for the OECD was down 0.1 in July 2010.

The downturn predicted for Canada, France, Italy, UK, China and India means that the signs suggest a slower rate of economic growth than was anticipated for last month. The outlook for Brazil, US and Japan is that they will possibly peak and their expansion may lose momentum. The German and Russian economies are expected to expand as are the OECD and the Euro areas. The OECD area last peaked in February 2008 and troughed in May 2009 along with the Euro area which last peaked in March 2008.

Expansion Slowdown Expected To Continue

The slowdown in economic expansion is set to continue according to the OECD Composite Leading Indicators for May 2010. The deceleration continued into the 10th month with an increase of 0.1% point.

France, Italy, China and India seem to have reached a peak in the growth cycle and signs of a peak are emerging in Canada the UK and Brazil. Ongoing expansion is still taking place in Germany, Japan, the US and Russia but at a slower pace. The ASEAN coutries are generally gaining momentum of recovery.

Euro Area Trade Surplus Down On Year

The euro area had a trade surplus of 1.8bn euros with the rest of the world in April 2010 compared with a 2.6bn euro surplus in April 2009. Exports fell by 2.4% in April 2010 against March 2010 and imports fell by 3.5%. The first estimates for the EU27 report a 10.2bn euro trade deficit on an annual basis. On a monthly basis there was a deficit of 7.2bn euros. Imports fell by 2.8% and exports by 2.4%.

The figures for January to March 2010 show that the EU27 deficit for energy rose by 66.6bn euros but the surplus for manufactured goods rose by 35.9bn euros. EU27 exports to all of its major trading partners grew in January-March 2010 especially to China (+48%), Brazil (+43%) and Turkey (+41%). The biggest increase in imports was to Russia with 35%.

The EU27 trade surplus with the US increased by 14.2bn euros. The trade deficit with China decreased from 37bn euros to 34.6bn euros but increased with Russia from 10.5bn euros to 18.2bn euros. The largest total trade deficit was the UK with 24.9bn euros.

Slower Rate Of Expansion May Continue

The OECD Composite Leading Indicators for April suggest that there is a slowing down of expansion in most OECD countries. The OECD area CLI increased by 0.4 to in April 2010, following from the 0.5 in March. The increase has slowed now for the nine consecutive months.

The growth cycle outlook suggests that potential peaks have appeared in Brazil and in China, France and Italy. The Major Five Asian economies (China, India, Indonesia, Japan and Korea) also display signs of a potential peak. The continuity is also there in Japan, US and Germany and is expected to be maintained though at a slower pace. Brazil's recent peaks were in October 2004 and May 2008 the most recent trough was in April 2009. The most recent trough in China was in February 2009 and their most recent peak was in December 2007.

OECD Points To An Expansion Slowdown

The Composite Leading Indicators from the OECD for March 2010 suggest that where the economic expansion has been taking place there may be a slowdown in the pace. Most of the signs of expansion and recovery say the OECD have been tentative but in France and Italy the signs are stronger. There is also a possibility that expansion may also be slowing in Brazil and China.

The CLI indicator for the OECD area as a whole was 0.6 points up in March 2010 with the US increasing by 0.8 and Japan by 0.9 points. The euro area increased by 0.5. Brazil and China both decreased by 0.3 points indicating the possible halt to expansion in China and to recovery in Brazil. India and Russia increased slightly by 0.3 and 0.6 points respectively.

Signs Of Economic Recovery Getting Stronger

OECD statistics for July are pointing to a broad economic recovery across all of the G7 countries. France, Italy and the UK are especially encouraging as the signs are that the main indicators in these economies are higher than this time last year. Most other countries indicators are better also showing signs of recovery but still lower than last year and there are signs of a trough appearing in Brazil. There are also signs of recovery in China, India and Russia. The OECD CLI increased 1.5 points in July, 1.9 points lower than July 2008. The euro area CLI increased by 1.9 points, 1.4 points higher than a year ago.