JOC 14/5/08

OECD: G7 slowdown coming

The Organization for Economic Cooperation and Development announced that its composite leading indicator for March points toward an upcoming economic slowdown in the OECD area as a whole, and a weakening outlook in all of the G7 countries -- the United States, Japan, Germany, France, United Kingdom, Italy and Canada.

The OECD's Composite Leading Indicator fell to 98.1 in March from a revised 98.6 in February, a decline of 3.2 points from a year earlier. The February CLI was revised down from a provisional figure of 98.9.

The CLI is a summary of information contained in a number of key short-term indicators and provides early signals of turning points in Gross Domestic Product or industrial production, the OECD said. Turning points in GDP or industrial output are generally found around six months after signals of turning points in the CLI, it said.

"The latest composite leading indicators suggest that a slowdown in economic activity lies ahead in the OECD area. March 2008 data indicate a weakening outlook for all the major seven economies," the report said.

For the U.S., the CLI fell 0.9 points to 97.9 in March, 3.6 points below its level in March 2007. This suggests that a slowdown is in store for the period ahead, the OECD said.

The data also suggest that the euro zone and Japan are about to experience economic slowdowns, although the slowdown is expected to be more moderate in Germany, it reported.