CLIs signal economic slowdown

The strong rebound in growth is showing signs of slowdown in several major economies, according to the latest OECD Composite Leading Indicators (CLIs), which draw on data points such as order books and confidence surveys to provide early signals of turning points in the business cycle.

CLIs in November and December 2021 signalled the approach of a post-pandemic growth peak – with suggestions the peak has now passed in several major economies. CLIs in Canada, Germany, Italy and the UK are showing a drop in momentum, while in Japan, the Euro area as a whole and the US they are stable but past their peaks. Emerging-market economies such as Russia, China – and in particular Brazil – are also showing signs of slowdown.

Higher-than-usual fluctuations in CLI and its components may be expected to persist as ongoing uncertainties due to the effects of the COVID-19 pandemic – currently from the impact of the Omicron variant – weigh down on economic activity.

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