Economies in industrial, developing nations are slowing – OECD

09 July 2012 18:50  [Source: ICIS news]

WASHINGTON (ICIS)--The economies of most major industrialised countries are slowing, and developing nations are facing a more dramatic downturn, the Organisation for Economic Co-operation and Development (OECD) said on Monday.

In its monthly global outlook, the Paris-based OECD said its composite leading indicators (CLIs) “point to an easing of economic activity in most major OECD economies and a more marked slowdown in most major non-OECD economies”.

The 34 OECD members are chiefly the major industrialised countries of Europe, North America and Asia but also Chile in Latin America and Israel in the Middle East.

The organisation tracks leading indicators for most nations, including those not members of the OECD.

The report for May, the latest available, shows the composite leading indicators for OECD member nations as a whole declined by 0.08% and followed a 0.03% decline in April.

The OECD-area composite indicators had showed a positive 0.10% pace of growth in January this year, but the index has been declining since then and dipped into negative territory with the April data.

May’s index reading for the overall OECD nations was 0.47% below the level seen in May 2011.

Leading indicators for Japan, the US and Russia remain above those nations’ long-term trends, said the report, “but they continue to point to dissipating momentum, especially in the case of Russia”.

In Europe, however, the forecast is more negative.  “The CLIs for France, Germany, ... the United Kingdom and the Euro area as a whole continue to point towards economic activity below long-term trends,” OECD said, adding: “In Italy, the CLI signals point more strongly to a slowdown.”

The report said leading indicators for China and India also are falling below long-term trends.

Only Brazil among developing nations shows economic activity heading toward long-term trend, “but with a weaker intensity than in last month’s assessment”, the OECD said.

The OECD’s forecast for slowing economic growth virtually worldwide could spell more trouble for the US because the already wobbly US recovery has been sustained largely on the strength of exports to Europe, Asia and the Subcontinent.

With the economies in those foreign markets now slowing, according to OECD, a resulting downturn in their imports could further threaten the US recovery.

The recent and disappointing US jobs picture for June and other recent data also have indicated slowing development in the US.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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