CLIs Continue To Strengthen But At A Slowing Pace

Although OECD Composite leading indicators (CLIs) for August continued to strengthen from the Covid-19 crisis lows, the pace of recovery has slowed and CLIs remain below the levels recorded prior to the initial COVID-19 outbreak.

The moderation in the pace of growth in CLIs was seen across all OECD major economies, especially in France, where the indicator has improved only marginally in the last two months.

A similar moderation has also occurred in all major emerging economies, except China, where the rate of expansion of the CLI (for manufacturing) remains stable, and also in Brazil where the CLI continues to strengthen.

With uncertainty persisting around the possibility of future mitigation measures, the CLIs should be interpreted with care, particularly when assessing month-on-month growth rates as underlying data used in their construction may be more volatile and subject to greater revision than normal. As always, the magnitude of the CLI 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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