The OECD has cancelled its scheduled monthly release of composite leading indicators (CLI), because of the rapid spread of the coronavirus outbreak.
The OECD said the monthly assessment, which is designed to anticipate turning points in economic activity relative to trend 6-9 months ahead, has not been able to capture the effects of the outbreak, such is the rapidity of the spread.
"In Europe, for example, tendency surveys were collected before the scale of the… outbreak in northern Italy became known," the OECD said. "In countries such as China, Japan and Korea, which were all much closer to the epicentre of the outbreak, the effects have already started to appear in CLI sub-components, and so too, in our current assessment for these countries, which is easing growth momentum."
The OECD last month highlighted a "high degree of uncertainty" in its CLI assessment arising from the coronavirus outbreak. The survey last month pointed to stable growth momentum, albeit below long-term trends, just as they did in January. The OECD will release its next CLI survey in April.
The effects of the coronavirus, including travel restrictions and slowing economic activity, are having a deleterious effect on oil demand. The IEA today said it expects global demand to fall this year, for the first time since 2009.
By Ben Winkley
