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Benchmark Revisions - July 2007

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Released: Tuesday, September 12, 2006

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

  • The leading index increased slightly in July, and there were upward revisions to several previous months as actual data for gross operating surplus of corporations became available. With July's increase, the six month growth rate of the leading index picked up slightly, to about a 5.0 to 6.0 percent annual rate in recent months. In addition, the strengths among the leading indicators have been somewhat more widespread than weaknesses in recent months.
  • The coincident index increased again in July. This measure of current economic activity has been on a slightly rising trend since mid-2005, and its growth rate has picked up slightly since the beginning of the year. In addition, the recent strength among the coincident indicators has been widespread.
  • The recent 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. At the same time, real GDP grew at a 3.2 percent average annual rate in the first half 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. Five of the eight components that make up the leading index increased in July. The positive contributors — from the largest positive contributor to the smallest — were stock prices, productivity for the whole economy*, operating surplus of corporations, volume of expected output, and new orders for engineering industries*. The negative contributors - from the largest contributor to the smallest - were consumer confidence and the fixed interest price index. Order book volume remained unchanged in July.

With the 0.1 percent increase in July, the leading index now stands at 137.5 (1990=100). Based on revised data, this index increased 0.3 percent in June and declined 0.2 percent in May. During the six-month span through July, the leading index increased 2.8 percent, with six of the eight components advancing (diffusion index, six-month span equals 75.0 percent).

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

With the increase of 0.1 percent in July, the coincident index now stands at 117.0 (1990=100). Based on revised data, this index increased 0.2 percent in June and increased 0.2 percent in May. During the six-month period through July, the coincident index increased 0.7 percent, with all of the 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 September 8, 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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