BL reported that the OECD composite leading indicators for February 2009 continue to signal a deep slowdown in the industrialized world. While the picture for all countries remains weak, the outlook in the US, Canada, Japan and major non OECD member economies, in particular, has further deteriorated.

According to the OECD secretariat, the CLI for the OECD area decreased by 0.6 points in February 2009 and was 9.7 points lower than exactly a year ago. There are, of course, some tentative signs of improvement in the rate of deterioration in countries such as Italy and France, but it may be premature to read much into these.

The famous BRIC economies too, continue to face strong slowdown. In particular, the CLI for India fell by 0.8 point in February 2009 and was 10.1 points lower than in February 2008. Brazil, China and Russia too, face strong slowdown compared with a year ago.

Stimulus packages announced by various countries mainly target investment in infrastructure projects. Such projects are usually highly commodity intensive, especially in the use of industrial metals like steel and base metals like aluminium and copper. There is, therefore, hope that metal prices may improve once demand weakness begins to disappear. This is widely anticipated to happen in the second half of the year.

(Sourced from Business Line)