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.
The CLIs for the United States and Canada also continue to point to stable
growth momentum. This is the case for the United Kingdom as well, where the
growth momentum remains above-trend rates. The CLI for Japan points to an
interruption in the growth momentum although this probably reflects one-off
In the Euro Area as a whole and in France, the CLIs point to stable growth
momentum. In Germany, the CLI suggests growth losing momentum, whereas in Italy
the CLI continues to indicate a positive growth momentum.
For the major emerging economies, the CLIs indicate growth around trend in
China and Russia and below trend in Brazil, while the CLI for India points to
growth gaining momentum.
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
- 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 press release focuses on the amplitude
adjusted form of the CLI, and includes the major countries and zones.
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.
area covers Canada, France, Germany, Italy, Japan, United Kingdom and United
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.
Five Asia area covers China, India, Indonesia, Japan and Korea.