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Benchmark Revisions - July 2007

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Released: Monday, August 14, 2006

The Conference Board announced today that the leading index for the U.K declined 0.1 percent, and the coincident index increased 0.1 percent in June.

  • The leading index decreased slightly again in June, and the declines in the previous two months were revised down slightly as a result of data revisions in the new orders of engineering industries component. Despite a slight slowing since April, the six-month growth rate of the leading index has been fluctuating in the 3.0 - 4.0 percent range (annual rate) in recent months. The growth of the leading index is well above the slightly negative rates in the second half of 2005, but it is still below the most recent high of almost 7.0 percent reached in the first half of 2004. In addition, the weaknesses among the leading indicators have increased somewhat, making the strengths and weaknesses among the components more balanced in recent months.
  • The coincident index increased slightly again in June. This measure of current economic activity has been on a slightly rising trend since mid-2005 and the recent strength has been more widespread among its components. At the same time, real GDP grew at a 3.4 percent annual rate in the second quarter of 2006, up from the 2.1 percent average rate in the second half of 2005. The current behavior of the leading index suggests that moderate economic growth should continue in the near term.

LEADING INDICATORS. Four of the eight components that make up the leading index increased in June. The positive contributors - from the largest positive contributor to the smallest - were order book volume, productivity for the whole economy*, volume of expected output, and consumer confidence. The negative contributors - from the largest contributor to the smallest - were stock prices, the fixed interest price index, and new orders for engineering industries*. Operating surplus of corporations remained unchanged in June.

With the 0.1 percent decrease in June, the leading index now stands at 136 (1990=100). Based on revised data, this index declined 0.3 percent in May and increased 0.8 percent in April. During the six-month span through June, the leading index increased 1.6 percent, with four of the eight components advancing (diffusion index, six-month span equals 50.0 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in June. The positive contributors - from the largest positive contributor to the smallest - were retail sales, employment *, and real household disposable income*. Industrial production declined in June.

With the increase of 0.1 percent in June, the coincident index now stands at 116.8 (1990=100). Based on revised data, this index increased 0.2 percent in May and decreased 0.1 percent in April. During the six-month period through June, the coincident index increased 0.5 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY: The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. ET on August 9, 2006. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are new orders in engineering industries, productivity of the whole economy, and operating surplus of corporations. Series in the coincident index that are based on The Conference Board estimates are employment and real household disposable income.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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