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Benchmark Revisions - May 2006

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Released: Thursday, April 12, 2007

The Conference Board reports today that both the leading and coincident indexes for France increased 0.2 percent in February.

  • The leading index increased slightly again in February. The production expectations and new unemployment claims (inverted) components made large negative contributions in February, but this was offset by a large positive contribution from industrial new orders. With this month's gain, the six-month growth rate of the leading index has continued to fluctuate around 0.2 to 0.4 percent (about a 0.3 to 0.8 percent annual rate) in the last four months, down sharply from the 3.0 to 3.5 percent average annual rate in the first half of 2006. In addition, the weaknesses among the leading indicators have continued to be slightly more widespread than strengths in recent months.
  • The coincident index also increased slightly in February, and the strengths among the coincident indicators continue to be widespread. Although the coincident index has been on a slightly rising trend since mid-2003, its growth has gradually slowed to about a 1.0 percent annual rate, down from a 2.0 percent rate at the beginning of 2006. At the same time, real GDP growth slowed to a 1.3 percent average annual rate in the second half of 2006 (including a 2.6 percent rate in the fourth quarter), down from the 3.2 percent growth (average annual rate) in the first half of 2006. The recent behavior of the leading and coincident indexes still suggest continued slow to moderate economic growth in the near term.

LEADING INDICATORS. Four of the seven components that make up the leading index increased in February. The positive contributors to the index — in order from the largest positive contributor to the smallest — are industrial new orders, the stock price index, the yield spread, and building permits (residential). The negative contributors to the index — beginning with the largest negative contributor — are the inverted new unemployment claims, production expectations, and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*.

With the increase of 0.2 percent in February, the leading index now stands at 129.5 (1990=100). Based on revised data, this index increased 0.2 percent in January and declined 0.3 percent in December. During the six-month span through February, the leading index increased 0.4 percent, and three of the seven components increased (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS. Three of the four components of the coincident index increased in February. The positive contributors to the index were industrial production, wage and salaries*, and employment*. Personal consumption declined in February.

With the increase of 0.2 percent in February, the coincident index now stands at 121.2 (1990=100). Based on revised data, this index increased 0.1 percent in January and increased 0.2 percent in December. During the six-month period through February, the coincident index increased 1.0 percent, with all four series making a positive contribution (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 April 10, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are ratio deflator of manufacturing value added to unit labor cost in manufacturing. Series in the coincident index that are based on The Conference Board estimates are number of employees and wage and salaries.

With the May 2006 release the FRANCE LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES underwent a benchmark revision. For more information on these benchmark revisions, look here on our website: http://www.conference-board.org/economics/bci/update.cfm?cid=3.

Please also visit the web site of our research associate in France: http://www.rexecode.fr/index.jsv

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

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