Leading indicators and tendency surveys
Suspension of OECD Composite Leading Indicators until September 2016
11/07/2016 - The OECD’s Composite leading indicators (CLIs) are designed to anticipate turning points in economic activity. They are constructed using a suite of underlying indicators that are selected on the basis of their forward-looking properties in relation to future movements in the economic cycle. The CLIs have proved an effective tool, including during periods of extreme volatility such as the financial crisis and the recent euro area crisis, precisely because the underlying sub-components were capturing expectations about future movements in the cycle. (see OECD Statistics Working Papers)
The CLIs cannot, however, account for significant unforeseen or unexpected events, for example natural disasters, such as the earthquake, and subsequent events that affected Japan in March 2011, and that resulted in a suspension of CLI estimates for Japan in April and May 2011. The outcome of the recent (23 June) Referendum in the United Kingdom is another such significant unexpected event, which is affecting the underlying expectation and outturn indicators used to construct the CLIs regularly published by the OECD, both for the UK and other OECD countries and emerging economies. While data collected prior to the UK referendum pointed to stable growth momentum in the OECD area and growth picking up in emerging economies, the underlying data that capture subsequent and potentially significant changes in expectations will not be available until early September.
As a consequence, to avoid providing an inaccurate and potentially misleading assessment of the short to medium term outlook, it has been decided to suspend the release of the OECD CLIs until 8 September 2016.