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Benchmark Revisions - July 2007

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Released: Thursday, November 9, 2006

The Conference Board announced today that the leading index for the U.K increased 0.2 percent, and the coincident index increased 0.2 percent in September.

  • The leading index increased again in September for the second consecutive month, following no change in July. Despite September's gain, the growth of the leading index has slowed somewhat to about a 3.0 to 4.0 percent annual rate in recent months, after picking up to about a 4.0 to 5.0 percent (annual rate) by mid-2006. The largest positive contributor was order book volume — for the second month in a row — more than offsetting the large negative contribution from consumer confidence. In addition, the strengths among the leading indicators have been more widespread than weaknesses in recent months.
  • The coincident index increased slightly in September, the fifth consecutive gain. This measure of current economic activity has been on a steady rising trend since mid-2005, following a slight slowdown, and its growth picked up slightly in recent months. In addition, the strengths among the coincident indicators have been widespread.
  • The leading index has improved in 2006, following weakness in the second half of 2005. At the same time, real GDP growth was at a 3.2 percent average annual rate in the first half of 2006, up from the 2.1 percent average annual rate in the second half of 2005. The recent behavior of the leading index suggests moderate economic growth should continue in the near term.

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

With the 0.2 percent increase in September, the leading index now stands at 137.7 (1990=100). Based on revised data, this index increased 0.3 percent in August and remained unchanged in July. During the six-month span through September, the leading index increased 1.5 percent, with five of the eight components advancing (diffusion index, six-month span equals 62.5 percent).

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

With the increase of 0.2 percent in September, the coincident index now stands at 117.2 (1990=100). Based on revised data, this index increased 0.1 percent in August and increased 0.2 percent in July. During the six-month period through September, the coincident index increased 0.6 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 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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