G7 economies weakening says OECD

Economic prospects have deteriorated in all Group of Seven major economies apart from Canada, according to the OECD's May "early…

Economic prospects have deteriorated in all Group of Seven major economies apart from Canada, according to the OECD's May "early warning" indicator released today.

"The composite leading indicators for May 2004 signalled weakening performance in all of the Group of Seven major economies except Canada," the Organisation for Economic Cooperation and Development said in a statement based on both monthly and six-monthly figures.

The OECD said the six-monthly indicators had been slipping in all major economies except Canada for periods between three and seven months, depending on the country.

The May leading indicator for the whole OECD area fell by 0.1 percentage points month-on-month in May and the six-month rate of change was down for the fourth month in a row, the OECD said.

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After introducing a new base year of 2000 for the statistics series, the May indicator stood at 103.7 compared to 103.8 in April on the new scale.

The change in base year had no effect on the growth rates indicated in the series, the OECD said.

The leading indicators for the United States fell to 103.3 in May from 103.5 in April while the index for the euro zone rose to 106.2 from 105.9 previously.

Japan's index fell to 96.5 in May from 97.0 while Germany's rose to 108.8 in May from 108.5 in April.

The French index rose to 105.9 from 105.3, Britain's fell to 101.6 from 101.9 and Italy's dipped to 99.0 in May from 99.4 in April.

Canada scored a full percentage point jump to 105.8 in May from 104.8 in April. Its six-month rate of change in leading indicators was also up smartly, to 8.4 in May from 7.7 in April

The six-month rate of change for other countries showed their economic performance weakening.

France showed the smallest change with 6.4 in May after 6.5 in April.

The OECD area's six-month rate fell to 4.6 in May from 5.8 in April and the rate in the United States fell to 2.0 from 3.3.

Strong slides were also registered in Japan (-0.5 from 0.6), Germany (6.1 from 6.7), Britain (2.0 from 3.3) and Italy (0.4 from 1.4).