OECD Indicators Signal Cooling in Major Economies, With Clear Signs in the Euro Area and Germany
The OECD observations point to a softening of economic momentum among its leading members, with the euro area showing a distinctly clear pattern and Germany among the most notable examples. These signals are part of a broader effort by the OECD to track how the global economy is adjusting to recent shocks and ongoing geopolitical tensions.
In a statement released this Monday, the Organization for Economic Co-operation and Development presents its August updates on advanced composite indicators. The report highlights expected shifts in the business cycle and reiterates a trend that has been visible for several months, particularly since the onset of the war in Ukraine. The message is not a single flash of weakness but a continuing recalibration across many economies.
Across most countries, the indicators declined last month, with the euro area showing especially pronounced losses. Germany stands out as one of the hardest hit, underscoring more generalized weakness in a manufacturing and export-oriented economy. The composite score for the region reflected this downturn, illustrating a broader trend rather than a one-off dip.
Specific countries show varied magnitudes of decline. Italy recorded a substantial fall with the index moving down markedly, while Spain also posted a noticeable drop. France experienced a meaningful decrease as well, underscoring a common European pattern of slower momentum in the near term.
Outside the euro area, declines were observed but were less pronounced in some cases. Canada shows a softer deterioration compared with prior months, while the United States also registered a reduction in the index, though the pace remained less intense than in several European economies.
There are exceptions to the general trend. For Mexico, the indicator remains above the 100 level, signaling resilience compared with its long-term average despite a modest retreat from the previous month. Colombia also stays just above the 100 mark, hovering near its longer-run baseline even after a small monthly dip.
In Japan, statistics continue to suggest stable growth prospects, with the index holding above 100 and nudging slightly, indicating steadier expansion alongside other major economies.
Among large non-OECD emerging economies, China shows a shift in its growth trend, with the indicator slipping below prior readings and signaling a slower pace ahead. Brazil continues to experience a decline in growth, contrasting with India’s steady, supported expansion and added resilience in its growth trajectory. The overall picture points to a mixed but cautious global outlook, where some economies show modest progress while others recalibrate after recent shocks. This ongoing assessment remains essential for policymakers and investors seeking to understand the horizon for next year. Source: OECD data.