In China, however, where containment measures have already been eased, the CLI for the industrial sector is tentatively pointing towards a positive change in momentum, with April’s CLI and a large upward revision for March both pushing the CLI upwards, writes the OECD.
Some care is needed in interpretation, as only partial information is currently available for China in April. In addition to the detailed statistical charts further below, visit the interactive OECD Data Portal to create your own charts with CLI data for more than 40 countries and area totals across varied time periods.Note: Composite leading indicators (CLIs) are designed to anticipate turning points in economic activity relative to trend six to nine months ahead.
However, care needs to be taken in interpreting CLIs in the current crisis as governments attempt to tackle the COVID 19 pandemic. Uncertainty surrounding the duration of lockdown measures has complicated the ability of CLIs to provide those forward looking signals.
For those economies still in lockdown and with uncertainty about the timing or nature of easing measures, current estimates of the CLI should be viewed as coincident rather than leading. As always, the magnitude of the CLI decline should not be regarded as a measure of the degree of contraction in economic activity, but rather as an indication of the strength of the signal..
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