CLIs Continue To Increase At A Steady Pace

The OECD Composite leading indicators (CLIs), designed to anticipate turning points in economic activity relative to trend, continue to point to a steady expansion in the OECD area as a whole.

For all major OECD economies, the CLIs now point to a steady expansion. The CLIs have continued to increase steadily in the United States, Japan, Canada and in the euro area as a whole, including Germany and Italy. Although remaining below trend, the CLIs for the United Kingdom and France now also signal a steady expansion.

Among major emerging economies, the CLIs continue to increase at a steady pace in Russia and China (industrial sector) whereas the pace of expansion of the CLI for India continues to moderate. The CLI for Brazil continues to point to slowing growth.

Despite the gradual lifting of COVID-19 containment measures in some countries and the progress of vaccination campaigns, persisting uncertainties might result in higher than usual fluctuations in the CLI and its components. As such, the CLIs 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 the degree of growth in economic activity.

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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.

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