Business Cycle Update

First Quarter 2025

Global business cycle in a less synchronized expansion

Many major economies displayed signs of late-cycle expansion, experiencing stable services activity and employment but softening manufacturing. The U.S. showed indications of both mid- and late-cycle dynamics. Weak domestic demand and structural headwinds raised recession risks in the Eurozone, while China continued to struggle to emerge from its growth slump. Canada is now on the cusp of early cycle, having benefited from lower rates and an improvement in economic activity.

  • Activity rebounds (GDP, IP, employment, incomes)
  • Credit begins to grow
  • Profits grow rapidly
  • Policy still stimulative
  • Inventories low; sales improve
  • Growth peaking
  • Credit growth strong
  • Profit growth peaks
  • Policy neutral
  • Inventories, sales grow, equilibrium reached
  • Growth moderating
  • Credit tightens
  • Earnings under pressure
  • Policy contradictory
  • Inventories grow; sales growth falls
  • Falling activity
  • Credit drives up
  • Profits decline
  • Policy eases
  • Inventories; sales fall
BCU InflationaryPressuresRed =HighRelativePerformanceofEconomicallySensitiveAssetsGreen =Strong+EconomicGrowth-RECOVERYCONTRACTIONEXPANSION U.S. Japan, Australia, Korea Mexico, Brazil, India UK Eurozone Canada China

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