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Benchmark Revisions - July 2007

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Released: Wednesday, October 10, 2007

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

  • The leading index declined slightly for the second consecutive month in August, following steady gains in the previous several months. Stock prices made the largest negative contribution to this month's decline in the leading index. With the decline in August, the six-month growth rate of the leading index has slowed to 1.2 percent (a 2.4 percent annual rate), down from the 2.0 to 2.5 percent rate (about a 4.5 percent annual rate) in recent months. The strengths and weaknesses among the leading indicators are roughly balanced both over the past month and during the past six months.
  • The coincident index increased again in August, continuing on a moderately rising trend that began in the middle of 2006. In addition, the strengths among the coincident indicators remain widespread. At the same time, real GDP grew at about a 3.3 percent average annual rate in the first half of 2007. The recent behavior of the coincident and leading indexes suggest that economic growth should continue, but possibly at a slow pace in the near term.

LEADING INDICATORS. Four of the seven components that make up the leading index increased in August. The positive contributors — from the largest positive contributor to the smallest — were productivity for the whole economy*, order book volume, consumer confidence, and operating surplus of corporations. The negative contributors — from the largest negative contributor to the smallest — were stock prices, volume of expected output, and yield spread.

With the 0.2 percent decrease in August, the leading index now stands at 129.3 (1990=100). Based on revised data, this index declined 0.2 percent in July and increased 0.2 percent in June. During the six-month span through August, the leading index increased 1.2 percent, with four of the eight components advancing (diffusion index, six-month span equals 57.1 percent).

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

With the increase of 0.2 percent in August, the coincident index now stands at 118.9 (1990=100). Based on revised data, this index increased 0.1 percent in July and increased 0.2 percent in June. During the six-month period through August, the coincident index increased 0.9 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 October 9, 2007. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are 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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