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Canada among nations headed for slowdown: OECD Print E-mail

Nov 17,  2011 Staff

Canada, along with the United States, China and others is heading towards an economic slowdown in the coming months, according to a report from the Organization for Economic Co-operation and Development.

The OECD issued its composite leading indicator (CLI) report Monday, showing that the rate had fallen for the seventh consecutive month in September, hitting 100.4.

In August the CLI was 100.9.

Canada's CLI fell 0.4 points to 99.4, down from 99.8 in August and 101.2 in May. Canada's leading indicator has been falling for several months, largely due to the slow global economic recovery and sluggish growth in the U.S.

The Paris-based organization said numbers were down across the board for member countries, and the results for many fell below their long-term averages.

Overall the news was grim, the OECD said.

"Compared to last month's assessment, the CLIs point more strongly to slowdowns in all major economies," the OECD said in a statement.

The CLI is designed to "anticipate turning points in economic activity relative to trend."

"Turning points of CLIs tend to precede turning points in economic activity relative to long-term trend by approximately six months," stated the report.

However, it is considered a broad measure and doesn't analyze the speed of a recovery or slowdown.

The report suggested that the CLI numbers for Japan, Russia and the U.S. all point to a likely future slowdown in the long-term growth average.

Canada, France, Germany, Italy, the U.K., Brazil, China, India and the European Union all show economic activity has already slipped below their long term averages.

Following are some key CLIs for September, with the number for August in brackets. The long-term average for each country or group is 100.

Following are some key CLIs for September, with the number for August in brackets. The long-term average for each country or group is 100.

  • Japan: 101.6 (102)
  • U.S.: 101.2 (101.5)
  • Canada: 99.4 (99.8)
  • Germany: 99.1 (100.4)
  • U.K.: 99 (99.8)
  • France: 98.6 (99.3)
  • Italy: 97.5 (98.5)
  • OECD area: 100.4 (100.9)
  • Euro area: 99.1 (99.9)
  • Major five Asian nations: 99 (99.3)
  • Major seven: 100.6 (101.1)
  • Russia: 102.4 (102.6)
  • China: 99.8 (99.9)
  • Brazil: 94 (95.1)
  • India: 93.8 (94.4)

Comments are now closed for this story

Jonathan from Saskatoon
The solution is simple, more trade agreements with emerging markets. China, for example, needs oil. And softwood. And beef, pork, etc. Let's get a deal done whereby they take the finished products instead of the raw resource. If Obama doesn't want a safe, stable source of energy that doesn't fund those trying to destroy the US, we can find others who do. And then we can start reciprocating on trade agreement violations. No need for the US troubles to continue to bring us down.

dteve dunn
@Hollis. i agree, now all we have to do is get some of the occup movement elected to parliment and all our problems will be solved .that is if they do not freeze to death this winter camping out in a park.

i'm off to the general store now to stock up on baked beans, powdered milk and shotgun shells. Oh, and banjo strings too.

I suggest you also google "Criticism of Fractional-reserve banking" and you see that it is essentially a giant pyramid scheme forcing borrowing to pay borrowing and causing unsustainable "bubbles" in the economic asset system (sound familiar?).

Hide your maple syrup!

Jim in Ottawa
No, not us! I thought we were somehow immune to events outside our borders, no? Perhaps if the NDP were in government, things would be a lot better.

Ummm... I will suggest this: google "fractional reserve banking". This will perhaps give you some insight into the true dangers of the current situation, and why "wiping the slate clean" is just not a realistic solution.

Second, beyond speculators, whom people love to blame for market volatility, consider this as a likely explanation for rising commodity prices: emerging market growth around the world= higher demand for commodities = higher prices. Also consider that governments around the world are devaluing their currencies in an attempt to inflate their troubled economies. Therefore: increase in money supply= decrease in value; therefore, it only makes sense that prices increase as a result. I'm sure speculators do impact market prices in some form or another, but at the end of the day, they follow the market. They don't make it.

For some reason we always love to blame others for our current situation. I think if you want to blame someone, blame the governments in Europe who spent beyond their means. Blame their citizens for allowing it to happen. And blame the banks who lent them the money.

Rob Calgary
Since when do I have to start bailing out my next door neighbor because of poor management and over spending! Get the vatican to bail them out.

Doom and Gloom become self fulfilling prophesies. Markets are always illusions of perceptions of smoke and mirrors. That is why people like Warren Buffet always stayed as far from Wall Street as possible. So he had a better view of the smoke and mirrors.

Lou R
There are large amounts of non productive money sitting idle on the side lines. It not being made available to create jobs or boost the economy. There is an old cleche. "If you want more wheat tax the farmers on their weeds instead of their crops"
I wonder how fast that money would come out of hiding.

the idea is to crash the world bank economy by going on a spending spree. The counters will be reset to zero in three years after the crash and a world currency along with it.

the world fiance ministers do not have anything to worry about. the occupy protest groups have the economic solutions to all there economic problems.

just sayin'
Is there a pattern here? 1. World economy is slowed down in large part by actions taken by the IMF,Reserve Banks,OPEC 's oil prices,etc. 2. Countries are then urged to 'Borrow&Spend' gotta have that economic stimulus. 3. Countries sink even farther into debt and are in worse fiscal position than they were before.4. Countries then are on the brink of bankruptcy and are basically controlled by institutions outside thier own borders.5. Other coutries then urged to increase thier own indebtedness to bail out the already failed countries. And who is all this money owed to anyways? At the end of the day we all live on the same planet and the money doesn't just dissapear. There should be a international meeting where everyone says hey you know what, this system isn't working, lets just wipe the slate clean. No country owes any other country anything. Stop paying massive amounts of interest on debt that's just created on paper anyways. Use your resources to care for your country. There has to be some group of ultra fat cats out there just chuckling at the international hamster wheel they've managed to create.

Kevin, couldn't have said it better myself! How these stock brokers and investors and such can justify there existance is beyond me. It's getting worse every day as now it is affecting if people can afford to eat. I have news for you, the reason our fuel is so high and the price of food is so high is mainly due to speculators who never see or touch the product, but raise its price by taking money for themselves. GREED. is the name of the game. I know its not nice to think about, but things will get much worse before they get better.

And everythign old is new again. Don't panic folks, this too shall pass.

Brian fr Langley
$'s from tar sands will help. In a very recent U.S article (deploring the current halt to Keystone) an American pundit said the U.S could be importing as many as 5 million barrels a day from Canada's 78 trillion barrel reserves. At a $100 per barrel we'll have at least one engine of our economy chugging along for some time to come.

PEI Fella
Here here Dave!

George V.
Every world country will be affected to a greater or lesser degree. Depending on resources, Gov''t stimulus packages, taxes and expenditures. It's present strength of it's economy. Preparedness by it.'s citizens. Investment laws in place governing banks and investment co. The countries reasonable management of it's national debt. Eliminating inefficient, unaffordable programs. The more negative economic reports issued by media, the less will be spent by it's citizens, the greater the problem.

Does it seem like everyone has a model for how long until everything collapses but no-one has a model for how to deter a collapse? Maybe if these money "geniuses" got an honest job and stopped messing around with other people's money things wouldn't be so erratic...

Parker Brown
Since the 1980s industrial nations have advocated Supply Side economic policies that encourage corporate liquidity and market freedom (Low Taxes, reduced government regulations, privatization of infrastructure, free trade, and monetary policies that encourage corporate liquidity.) The assumption is that corporate liquidity leads to investment and increased economic activity. One of the main criticisms of these supply side policies is that they create a Liquidity Trap. (For example, at present Canadian corporations have 0.5 Trillion in cash reserves. Unless market demand increases they have little incentive to invest these cash reserves in increased production.) When faced with a Liquidity Trap the methods that corporations will use to improve profitability are (a) Extend credit to customers to increase demand (b) Use their cash reserves to finance takeovers and mergers (c) use their cash reserves to finance predatory competition (d) implement greater production efficiencies (consolidation and streamlining). By these mechanisms Liquidity Traps encourage consumer indebtedness and monopoly formation.

The "doomer & gloomers" weigh in... this is getting more than a little boring. Its going to be slow going but at least we are going.... so how bout some positive news and less from the dark side?

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