The latest composite leading indicators (CLIs) suggest that continued economic expansion lies ahead in the OECD area. December 2006 data show improved performance in the CLI’s six month rate of change in Canada, the United States and Japan, but weakening performance in the Euro area. The spreads between short- and long-term interest rate are contributing negatively to the performance of the CLIs in all the major seven economies, while business confidence is contributing positively in the United States, Germany and the United Kingdom. The latest data for major OECD non-member economies point to strong growth in China, India and Brazil, but a weakening outlook for Russia.

The CLI for the OECD area increased by 0.3 point in December to 109.9 from 109.6 in November, but its six-month rate of change has been relatively stable since August 2006.

The CLI for the United States rose by 0.4 point in December and its six-month rate of change increased for the third month in a row. The Euro area’s CLI was unchanged in December, but its six-month rate of change has fallen since June 2006. In December 2006, the CLI for Japan rose by 0.2 point and its six-month rate of change has increased for the last five months.

The CLI for the United Kingdom fell by 0.4 point in December and its six-month rate of change shows a downward trend since May 2006. The CLI for Canada rose by 0.4 point in December, and its six-month rate of change shows an upward trend since May 2006. For France the CLI fell by 0.5 point in December, and its six-month rate of change decreased for the second consecutive month. The CLI for Germany rose by 0.3 point in December, but its six-month rate of change shows a downward trend since May 2006. For Italy the CLI decreased by 0.1 point in December and its six-month rate of change fell for the sixth month in a row.

The CLI for China rose by a strong 5.9 points in December, and its six-month rate of change increased for the third consecutive month. The CLI for India increased by 1.4 point in November, and its six-month rate of change was up for the fourth month in a row. The CLI for Russia rose by 1.5 point in December, but its six-month rate of change shows a downward trend since May 2006. In December, the CLI for Brazil increased by 1.9 point and its six-month rate of change shows an upward trend since June 2006.