Global Pendulum
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Issue 1 · Late October 2026

Leading index → Industrial output

Common explanation (Knock-on · same direction): Orders and confidence move first, and production adjusts after.

This issue: Leading index at 42 (neutral), Industrial output at 61 (warm) — at least one is in the neutral range (40⁠–⁠60), so we make no call this issue.

Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.

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Where it stands now

Where the two indicators stand this issue

Leading index: Now 100.14. Industrial output: Median position across economies 61.

Tests

Does this link hold up?

  1. Common explanationOrders and confidence move first, and production adjusts afterSource: OECD, “Composite Leading Indicators Frequently Asked Questions (FAQs)” (2024).
  2. Tested against our dataAgreement between the positions of Leading index and Industrial output (3-month lag), measured in the direction of the common explanation: +0.66. Looking at every 5-year period (shifted one year at a time), the two moved in that direction in all 10, but that does not mean they always will; data start only in 2011. Supported by the data
  3. Periods when it did not holdAcross 10 5-year periods, out of step in none.

History

The two lines, overlaid

Data: Organisation for Economic Co-operation and Development (OECD), Composite Leading Indicators; US: Federal Reserve G.17 (INDPRO), via FRED (Federal Reserve Bank of St. Louis); others: World Bank Global Economic Monitor (CC BY 4.0). Positions: our calculation.

Leading indexIndustrial output

Time lag

At what lag do they match best?

Longer bar = moves more in the direction of the common explanation (the number is the agreement).

Limits

What this card cannot tell you

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