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.

Signs Of Weak Growth Prospects In OECD CLI's

The composite leading indicators of the OECD suggest there may be weak growth prospects in major economies. The CLIs for Japan, Germany, France and the Euro Area pont to weak growth but there are signs of stabilisation in other economies such as Canada, China and the US and possibly Italy as well. Weak growth signs also appear in India and Russia.

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.

Euro Area Trade In Balance

The first estimate from Eurostat for euro area trade with the rest of the world in May 2011 was in balance. There was a deficit of 4.9bn euros for the same period last year. In April 2011 the deficit was 4.8bn euros. The EU27 is estimated to have had a deficit of 13.2bn euros in May 2011 compared with -16bn euros in May 2010. The April balance was a 16.4bn euros deficit in 2011 compared with 12bn euros deficit in 2010. The euro area's main trading partners between January and April 2011 in euro terms were the United States, United Kingdom and China. Russia saw a 33% growth in imports from EU17. The main trading partners with the EU27 were the United States and China.

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.

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.

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.