THE OECD Composite leading indicators (CLIs) for September continue to recover from the Covid-19 crisis lows, but at a moderating pace.
For all major OECD economies, the CLIs in September continue to signal that GDP will remain below trend. While in France and Germany the CLIs are now pointing to a stabilisation in growth, in the United States, Japan, United Kingdom, Canada and Italy they continue to point to a moderation in growth.
Among major emerging economies, the CLIs for India and Russia continue to signal moderating growth. This is now also the assessment for Brazil (albeit with the level of GDP expected to be above trend). In China, the CLI (for manufacturing) points to a stabilisation in growth.
With the resurgence of COVID-19 cases in many countries, there remains considerable uncertainty around the possibility of future mitigation measures that may curtail economic activity, and which may not be fully factored into current indicators used in the construction of the CLIs. As such this month’s CLIs should continue to be interpreted with care.
As always, the magnitude of the CLI should be regarded as an indication of the strength of the signal rather than as a measure of the degree of growth in economic activity.
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