Nobody will escape economic slowdown: OECD

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PARIS— Reuters
Published Monday, Nov. 14, 2011 6:16AM EST
Last updated Monday, Nov. 14, 2011 8:49AM EST

None of the world’s major economies will escape a slowdown, the Organization for Economic Co-operation and Development said on Monday, highlighting increasing signs that growth momentum is dwindling across the board.

The Paris-based organization’s composite leading indicator (CLI) for its members fell for the seventh straight month to 100.4 in September, down from 100.9 in August and hitting the lowest reading since December 2009.

Readings for individual countries and big developing world economies were broadly lower at levels indicating slowdowns, and were in many cases below their long-term averages.

“Compared to last month’s assessment, the CLIs point more strongly to slowdowns in all major economies,” the OECD said in a statement.

The OECD CLIs are designed to anticipate turning points in economic activity relative to trend -- a turnaround in an indicator tends to precede turning points in economic activity by around six months.

The Group of Seven’s CLI fell to 100.6 in September from 101.1 in August while the reading for the euro area dropped to 99.1 from 99.9, well below its long-term average of 100.

Japan’s CLI remained above its long-term average of 100 with a reading of 101.6, but it was still down from 102.0, suggesting an economic recovery after its March earthquake and tsunami disaster is losing steam.

Economic momentum in the United States eased only slightly, according to the OECD’s indicator, which fell to 101.2 from 101.5.

The Chinese economy also showed only marginally weaker activity with a reading of 99.8, down from 99.9. Among other emerging market economies, Brazil’s CLI fell to 94.0 from 95.1 while India’s reading decreased to 93.8 from 94.4.

In a report released at the end of last month, the OECD slashed its 2012 growth estimate for the United States to 1.8 per cent from 3.1 per cent and cut its forecast for growth in the euro area next year to 0.3 per cent from 2.0 per cent in May.