Goldman's Global Leading Indicator's January reading and the latest revisions to previous months paint a significantly softer picture of global growth placing the global industrial cycle clearly in the ‘Slowdown’ phase. They add, rather ominously, While the initial shift into ‘Slowdown’ (which we first noted in October [6]) had a fairly idiosyncratic flavor, the recent growth deceleration now looks more serious than in previous months. Of course, as we noted yesterday, Jan Hatzius us rapidly bringing his optimistic forecasts back to this slowdown reality [7].
Swirlogram solidly in "slowdown" phase...
[8]
Via Goldman Sachs,
The January reading and the latest revisions to previous months paint a significantly softer picture of global growth and the GLI now locates the global industrial cycle clearly in the ‘Slowdown’ phase. Since GLI Momentum peaked in August 2013 at 0.39%, it has slowed by about 20bps to 0.19% currently. While the initial shift into ‘Slowdown’ (which we first noted in September) had a fairly idiosyncratic flavor, with the AUD and CAD TWI aggregate the biggest driver, several additional components have now worsened too, further substantiating the GLI shift into ‘Slowdown’.
[9]
The January Final GLI places the global industrial cycle clearly in the ‘Slowdown’ phase, with positive but decreasing Momentum. Previous GLI readings had already highlighted that global activity growth peaked in August and the latest revisions show the subsequent deterioration more visibly. Some idiosyncratic factors might have had a hand in amplifying the current softness, but still the recent growth deceleration now looks more serious than in previous months.
Source: Goldman Sachs