Canada won’t dodge downturn: OECD

PARIS—Canada, the U.S. and China are among the countries on track for an economic slowdown in the coming months, according to a report from the Organization for Economic Co-Operation and Development (OECD).

The OECD’s monthly index of composite leading indicators for its member countries fell to 100.4 in September, down 0.4 percentage points from August and down from 102.3 in May.

The OECD uses the index to foresee economic trends six to nine months ahead, but cautions it’s a broad measure not intended to judge the speed or strength of a recovery or downturn.

Canada dropped 0.4 points, which took its composite leading index number to 99.4, down from 101.2 in May. The country’s leading indicator has been falling for several months and dropped below 100 in August.

The Canadian economy has weathered the recession and its aftermath better than many other countries, but is still feeling the drag of a painfully slow global recovery.

Severe debt problems in Europe and slow growth in the U.S. have combined to sink demand for the natural resources Canada’s economy relies on.

Finance Minister Jim Flaherty says Europe must use its own resources to resolve its economic crisis before other countries contribute, all but demanding Europe build a “very strong firewall” to protect their banks and prevent debt contagion from spreading.

“Generally, I think the view is that we first need to see that very substantial commitment and action by the Europeans—and I’m talking about the members of the euro zone—before any more would be asked of non-European G-20 countries,” said Flaherty.

The U.S. posted a CLI of 101.2 in September, down 0.3 points from August and down from 101.7 in May.

China’s CLI dropped to 99.8 in September, down one point from August and down from 100.6 in May.