OECD: Canada still in 'strong slowdown'

May 11, 2009

11 May 2009

OECD: Canada still in 'strong slowdown'

The following is excerpted from today's edition of the “National Post”.

Canada is not among a small group of major economies showing tentative signs of a "pause" in their economic slowdown, the Organization of Economic Co-operation and Development said Monday.

Those countries showing less gloomy signals are China, the United Kingdom, France and Italy, said the OECD, a Paris-based think-tank sponsored by major western democracies, in its monthly report of composite leading indicators.

The report is intended to give early signals of the business cycle's turning points....

Canada, with its fortunes far more closely tied to the U.S. than its major trading partners, remains in a "strong slowdown" phase of the economic cycle, with its [composite leading indicator] CLI falling by 0.4 points to 91.1 in March. The total was 10.2 points lower than during the same period a year ago.

The CLI for the United States fell by 0.6 points in March, to 89.9, and was 11.8 points lower than a year ago.

France, where a relatively large portion of the economy is in the public sector, the CLI increased by 1.2 points to 97.9 and was only 2.7 points below the previous year.

The CLI looks at various components of economic activity in order to give early signals of the business cycle's turning points, according to the OECD.

An economic "expansion" would be indicated if the CLI was above 100 and increasing, while a "downturn" would be marked by the index decreasing but still above 100.

In economic parlance, a CLI that's both falling and below 100, like Canada's, signifies an economic "slowdown." A beacon for a "recovery" would be a CLI increasing but still below 100.

Canadian Economy & Politics
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