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The current global economic activity may be succinctly summed up in just one word – ‘slowdown'. This is confirmed by the latest OECD composite leading indicators for September 2011 released today. The data point to continuing slowdown in economic activity in most OECD countries and major non-member countries.
The leading indicators are designed to anticipate turning points in economic activity relative to trend; and compared to the previous month's assessment, the latest data point more strongly to slowdown in all major economies.
The entire OECD region including the euro area is facing a slowdown. The famed BRIC economies are not spared either, with Brazil, Russia, India and China all facing slowing economic activities. The slowdown has been evident since May 2011.
Commodity markets are usually the first one to pick up cues of changes in growth, especially via the demand route. In recent months, the prices of growth commodities such as energy products, base metals and industrial metals have been under downward pressure following concerns over slowing demand.
Even China, usually the saviour of the world metals market, has been on a destocking spree in recent times. Unresolved sovereign debt issues in Europe are seen negative for demand growth.
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