Rich Countries Sap Momentum From a Weakened Global Economy

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There’s limited hope for an imminent turnaround in the global economy as the richest nations continue to lose momentum.

The OECD’s Composite Leading Indicator fell for 12th straight month in March, hitting its lowest level since 2009. A measure for the U.S. is also at the weakest in almost a decade, while the euro-area reading was the worst since 2013.

The indicator, designed to anticipate turning points six to nine months before they happen, shows growth momentum is easing for all the Group of Seven economies, with the exception of France where it is stable. The situation is slightly brighter in major emerging economies including China, where the index points to stable growth momentum.

The OECD data underscores a fragile situation for the global economy in 2019 as fears of a full-blown U.S.-China trade war exacerbate already weak trade and depress output in exporting countries.

The euro area has suffered particularly as it is caught in the trade crossfire and lumbered by homegrown difficulties from a slump in the German auto industry to political unrest in France. The CLI hit its lowest level since 2012 for Germany, Europe’s largest economy.

The OECD said the stable growth momentum in China reflects more positive signals from the chemicals and construction sectors and share prices. Of the major economies in the report, only Brazil shows signs of growth gaining momentum.

To contact the reporter on this story: William Horobin in Paris at whorobin@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Zoe Schneeweiss

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