Leading indicators continue to indicate slowing growth in most major economies

October 12, 2022

The OECD Composite Leading Indicators , designed to anticipate turning points in economic activity relative to trend with information up to September 2022, continue to indicate slowing growth in the OECD area and in most major economies dragged down by high inflation, increasing interest rates and declining share prices.

Among major OECD economies, the CLIs remain below trend and continue to point to slowing growth in Canada, the United Kingdom and the United States, and also in the euro area including France, Germany and Italy. The CLI for Japan continues to anticipate stable growth.

Among major emerging-market economies, a loss in growth momentum is expected in China (industrial sector) and Brazil but the CLI for India continues to indicate stable growth.

The OECD CLIs are cyclical indicators based on a range of forward-looking indicators such as order books, building permits, confidence indicators, long-term interest rates, new car registrations and many more.

In the face of persistent uncertainties related to the impact of the war in Ukraine, especially in energy markets, and ongoing COVID-19 threats, the CLI components might be subject to larger-than-usual fluctuations. As a result, the indicators should be interpreted with care and their magnitude should be regarded as an indication of the strength of the signal rather than as a measure of growth in economic activity.

OECD area: Growth losing momentum		China: Growth losing momentum

United States: Growth losing momentum		Euro area: Growth losing momentum

The above graphs show country specific composite leading indicators. Turning points of CLIs (marked by shaded triangles) tend to precede turning points in economic activity relative to trend by six to nine months. The horizontal line at 100 represents the trend of economic activity.

Canada: Growth losing momentum		France: Growth losing momentum

Germany: Growth losing momentum		Italy: Growth losing momentum

Japan: Stable growth		United Kingdom: Growth losing momentum

Brazil: Growth losing momentum		India: Stable growth

The graphs show country specific composite leading indicators. Turning points of CLIs (marked by shaded triangles) tend to precede turning points in economic activity relative to trend by six to nine months. The horizontal line at 100 represents the trend of economic activity.

Table 1: Composite Leading Indicators*

	Ratio to trend, amplitude adjusted					Month on Month change					Growth cycle outlook	Memorandum item Last month’s growth cycle outlook (when different from current assessment)
	(long term average =100)					(%)
	2022					2022
	May	Jun	Jul	Aug	Sep	May	Jun	Jul	Aug	Sep
OECD Area	99.6	99.3	99.0	98.8	98.6	-0.32	-0.30	-0.27	-0.23	-0.20	Growth losing momentum
Euro Area	99.6	99.2	98.9	98.6	98.3	-0.35	-0.34	-0.32	-0.30	-0.28	Growth losing momentum
Major Seven	99.4	99.1	98.8	98.6	98.4	-0.33	-0.31	-0.27	-0.23	-0.20	Growth losing momentum

Canada	99.5	99.1	98.8	98.4	98.1	-0.40	-0.41	-0.38	-0.33	-0.30	Growth losing momentum
France	98.9	98.6	98.5	98.3	98.2	-0.31	-0.25	-0.19	-0.15	-0.15	Growth losing momentum
Germany	99.9	99.5	99.0	98.6	98.1	-0.42	-0.45	-0.47	-0.46	-0.46	Growth losing momentum
Italy	99.1	98.7	98.3	98.0	97.7	-0.43	-0.39	-0.36	-0.32	-0.29	Growth losing momentum
Japan	100.5	100.5	100.5	100.5	100.5	0.00	-0.01	-0.01	0.00	-0.01	Stable growth
United Kingdom	97.1	96.6	96.3	96.0	95.7	-0.72	-0.52	-0.37	-0.31	-0.31	Growth losing momentum
United States	99.4	99.1	98.9	98.6	98.5	-0.32	-0.32	-0.27	-0.21	-0.17	Growth losing momentum

Brazil	99.0	98.8	98.7	98.6	98.5	-0.20	-0.18	-0.16	-0.12	-0.11	Growth losing momentum
China**	98.9	98.8	98.7	98.6	98.5	-0.10	-0.09	-0.10	-0.11	-0.11	Growth losing momentum
India	100.2	100.2	100.1	100.1	100.0	-0.05	-0.05	-0.05	-0.05	-0.05	Stable growth