The OECD CLI is designed to provide early signals of turning points (peaks and troughs) between expansions and slowdowns of economic activity, covering a wide range of key short-term economic indicators like housing permits granted, financial data, and information on stocks and orders, etc. A fall in the indicator suggests the possibility of a weak economic trend ahead.

In the US, the CLI fell by 1.5 points in February, with its six-month rate of change down for the second month in a row after two months of increase. Similarly, the UK’s CLI fell 1 point in February, whereas its six-month rate of change has fallen steadily since June 2002. In Canada, the drop in the CLI was by 0.5 point in February. Its six-month rate of change has been on the decline since May 2002.

France saw a sharp decrease in its CLI in February, as well as in its six-month rate of change. The CLI for Germany also fell after five months of increases, though its six-month rate of change has been in a slump for nine months. In Japan, February’s CLI remained unchanged, in keeping with its stable six-month rate. Italy bucked the trend; its CLI rose in February, as did its six-month rate of change.

©OECD Observer No 237, May 2003