- The global economy is at a precarious moment. While OECD leading indicators point to further downside, PMI new orders actually picked up, driven partly by China and stabilising world trade growth.
- Geographically, the most weakness is found in euro area manufacturing, not least in German manufacturing orders. and the US manufacturing indicators point to an industrial recession.
- The weakness is driven, in particular, by soft investments and business confidence globally, which are both at levels normally seen in G7 recessions, while corporate earnings growth is also waning or even negative in the euro area and emerging markets.
- The stalwart of the global economy so far, the confidence of private consumers, has started to show weakness despite still-robust real income growth. This is evident in China and, to some extent, the US, while euro area consumer confidence remains resilient.
- Monetary easing is showing up around the world: The US financial conditions impulse is still positive (though waning a bit), Chinese M1 and euro area money growth have picked up. There is increasingly solid growth in private sector loans in the euro area.
OECD leading indicators – levels
OECD leading indicators – monthly momentum
Global MacroScope models
(for OECD Composite Leading Indicators – CLI)
MacroScope medium lead models – across regions
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(for OECD Composite Leading Indicators – CLI)
Global PMI
Container index vs PMI
OECD consumer
