Global growth is set to slow according to Goldman Sachs’s Global Leading Indicator (GLI), which is basically an index which tries to highlight trends ahead of economic reports released by individual countries.
Growth is slowing, but it will remain robust in developing markets.
Goldman’s Dominic Wilson:
Headline and Momentum Ease Further. Our September Final GLI headline reading came in at 4.6%yoy, down from last month’s revised 5.9%yoy. While the improved GLI shows a peak in March, the headline remains at an elevated level. However, monthly momentum remained negative for the fourth month in a row, and was unchanged from the revised August reading of -0.09%mum. This is below the positive Advanced September momentum, due largely to the poor performance of the components that are excluded from the Advanced reading. In addition, two of three components for which we use proxies in the Advanced reading underperformed their substitutes.
Deceleration in Industrial Growth Continues. We have highlighted since mid-July that the GLI points to slowing industrial momentum, albeit from high levels. While our US forecast remains below consensus, we do not envisage a sharp slowdown in global growth. We remain cautious, however, given the moderation in economic data over the past few months, as reflected in the fourth consecutive negative momentum reading.
Earlier double dip recession fears are being trumped by the idea that we have just had a mid-year slow-down.
(Goldman Sachs, Global Leading Indicator, 4 October 2010)