Composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, continue to point to stable growth momentum in the OECD Area as a whole. Growth in the US and UK is expected to moderate while indicators suggest it's deteriorating in China. Separately, Eurostat revised Euro Area growth up in both the first and second quarters.


The Organisation for Economic Cooperation and Development reported that CLIs signal stable growth momentum in the Euro Area as a whole, particularly in Germany and Italy, while growth is firming in France. Stable growth momentum is also anticipated in Japan. In India, the CLI points to firming growth.

Growth momentum is anticipated to moderate in Canada as well as in the United Kingdom and the United States, albeit from relatively high levels. On the other hand, the outlook continues to deteriorate for China, with the CLI pointing more strongly to a loss of growth momentum. Signs of slowing growth momentum are also re-emerging in Russia. In Brazil, weak growth momentum is anticipated.

An OECD Composite Leading Indicator, as the name suggests, is constructed from a small number of economic time series that have similar cyclical fluctuations to those of the business cycle, and moreover have a tendency to turn earlier than the business cycle. The business cycle is typically represented by movements in GDP around its long term trend. The OECD CLIs are composite indicators with components that:

measure early stages of production;
respond rapidly to changes in economic activity;
are sensitive to expectations of future activity or
are control variables that measure policy stance.

A large set of component series, selected from a wide range of economic indicators, are used in constructing CLIs (around 200 series are used in total, about 5-10 for each country). CLIs are calculated for 33 OECD countries, 6 non-member economies and 8 zones. They are calculated in three forms: amplitude adjusted, trend-restored, and year-on year growth rate. These are comparable, respectively, with the de-trended reference series, the original reference series and the year-on-year growth rate of the reference series.
The OECD-Total covers the following 33 countries: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, and United States.

The G7 area covers Canada, France, Germany, Italy, Japan, United Kingdom and United States.

The Euro Area (only Euro Area countries that are members of OECD) covers the following 15 countries: Austria, Belgium, Estonia, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, the Netherlands, Portugal, Slovak Republic, Slovenia and Spain.

The Major Five Asia area covers China, India, Indonesia, Japan and Korea.

Euro Area

Eurostat, the EU's statistics office, reported Tuesday that GDP grew in the second quarter by 0.4% up from the initial estimate of 0.3%. The first quarter was revised from 0.4% to 0.52%.

German exports, surplus, 2015Germany’s trade was 2.4% higher in the second quarter at €103bn adding another €25bn to the country’s trade surplus, a record high.

“The German data is offering some relief that the European recovery remains on track and German exports are not impacted too much by the emerging market turmoil,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

Destatis, the German federal statistics office, reported also Tuesday that Germany exported goods to the value of €107.1bn and imported goods to the value of €82.1bn in July 2015. German exports increased by 6.2% and imports by 6.1% in July 2015 year-on-year. After calendar and seasonal adjustment, exports rose by 2.4% to €103.4bn and imports by 2.2% to €80.6bn compared with June 2015. Destatis said these "are the highest seasonally adjusted monthly figures ever calculated both for exports and for imports."

The foreign trade balance showed a record surplus of €25.0bn in July 2015. In July 2014, the surplus amounted to €23.5bn.

Eurostat also reported that in the month of July 2015, the seasonally adjusted volume of retail trade rose by 0.4% in the Euro Area (EA19) and by 0.3% in the EU28. In June retail trade fell by 0.2% and 0.1% respectively.

In July 2015 compared with July 2014 the retail sales index increased by 2.7% in the Euro Area and by 3.3% in the EU28.

Pic above" Angela Merkel, German chancellor, speaking Monday at a joint press conference with Sigmar Gabriel, vice chancellor and economy minister, on the refugee crisis, Berlin, 7 Sept, 2015.