11/12/2012 10:14 EST | Updated 01/12/2013 05:12 EST

OECD: Canadian Economy Stabilizing, Along With U.S., China

The head offices of Canada's biggest banks are shrouded in fog and cloud as a sign board display's the final closing number of the year for the TSX of Friday, Dec. 30, 2011, in Toronto. (AP Photo/The Canadian Press, Frank Gunn)

OTTAWA - The outlook for the economy has brightened somewhat for Canada and two countries critical to Canadian exporters, according to the Organization for Economic Co-operation and Development.

The Paris-based global economic organization said Monday that its composite leading indicator points to stabilizing growth in Canada, as well as in the United States and China — two economies that impact Canadian exports.

The OECD did not issue growth projections, but the new leading indicator reading for Canada shows a small rise of 0.02 percentage points in September, after going unchanged in August and dropping slightly in the previous three months.

For the U.S., Canada's biggest export market by far, the index rose one-tenth of a point, while China's steep decline appears to have been arrested.

Canadian policy-makers have noted they were becoming more optimistic that the U.S. finally appears poised for a more sustained recovery and have been encouraged by the recent pickup in home prices and home construction south of the border.

The organization also said data from United Kingdom and Brazil point to a pickup in growth and that there were tentative signs of economic stabilization emerging in Italy.

Despite the bright spots, the overall finding of the OECD's index, which is designed to anticipate turning points in economic activity, is that economies in many major industrialized countries remains soft.

"The (leading indicators) for Japan, Germany, France and the euro area as a whole continue to point to weak growth," the report states, adding that is also true for India and Russia, which are not part of the 34-country OECD group.

In a separate analysis Monday, the Bank of Montreal said it believes Canada's economy grew by a slow one per cent in the third quarter, which ended in September.

That number is not a surprise. The Bank of Canada has an identical expectation.

BMO attributes the anemic quarter to a contraction in residential construction and business investment, as well as weak exports, including in the energy sector as the U.S. demand for oil slowed and prices fell.

Supporting growth in the three-month period were robust retail sales and non-residential construction.

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