"Major economies are ‘close to low point’
By Daniel Pimlott, Economics Reporter
Published: June 8 2009 13:33 | Last updated: June 8 2009 20:17
Most of the world’s big economies are close to emerging from recession, according to data published on Monday by the Organisation for Economic Co-operation and Development that pointed to a possible recovery by the end of the year.
The Paris-based organisation reported in its latest monthly analysis of forward-looking indicators that a “possible trough” had been reached in April in more developed countries that make up almost three quarters of the world’s gross domestic product.
The composite index for 30 economies rose 0.5 points in April, the second monthly rise in a row, after falling for the previous 21 months. The index seeks to identify turning points in the cycle about six months in advance.
The OECD said its overall measure of advanced member countries – ranging from the eurozone and the UK to the US, Mexico and Japan – now pointed to “recovery” instead of the “strong slowdown” they had been suffering since last August.
“It is still too early to assess whether it is a temporary or a more durable turning point,” the organisation said. But the data “point to a reduced pace of deterioration in most of the OECD economies with stronger signals of a possible trough in Canada, France, Italy and the United Kingdom”.
The improved global outlook came amid evidence that the US jobs market strengthened in May for the first time in 16 months. The Conference Board said its employment trends index moved up to 89.9 last month from 89.7 in April. This follows data last week that showed the US shed far fewer jobs than expected in May.
”The moderation of the last two months is certainly a sign that the decline in job losses is real and signals that the worst is over,” said Gad Levanon, economist at the Conference Board.
Twenty-two out of the 30 OECD countries saw a rise in forward-looking measures of activity. The US saw its first improvement in the outlook since July 2007, while Germany and Japan both among the worst hit economies in the developed world, saw an improvement in their outlook for the first time since early last year.
China had seen a “possible trough”, though India, Brazil and Russia were still facing a sharp slowdown, the OECD said.
The OECD measure is based on data such as share price moves, inventory levels and consumer and business confidence in its member nations.
Copyright The Financial Times Limited 2009"