Economic trough may be at hand

Economic indicators monitored by the OECD point to things worsening more slowly and suggest that at least in some major economies a trough may be at hand.

Every month, the OECD publishes "composite leading indicators" for the major economies which attempt to indicate turning points in economic activity six months ahead.

They reflect a range of data, including new manufacturing orders, raw material prices, building approvals and confidence measures.

"While it is too early to assess whether it is a temporary or more durable turning point, composite leading indicators for April 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 UK," the OECD said yesterday.

"The signals remain tentative but they are present in the majority of the component series for these countries."

Indices for the United States, Japan, Germany and India improved but only marginally and they are all still classified as in a slowdown phase.

Meanwhile, a monthly survey of forecasters' views by Consensus Forecasts is also showing signs of stabilising.

In the May survey, expectations for New Zealand trading partners' growth this year were revised down slightly last month to a 2.3 per cent contraction, but forecasts for next year were unchanged and positive, with 2 per cent growth expected.