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Benchmark Revisions - May 2006

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Released: Thursday, May 22, 2008

The Conference Board reports today that the leading index for France declined 0.1 percent and the coincident index remained unchanged in March.

  • The leading index declined slightly in March, its fifth consecutive monthly decline. Building permits and industrial new orders made positive contributions in March, but negative contributions from stock prices and (inverted) new unemployment claims more than offset these positive contributions. Also, the yield spread became inverted, resulting in a negative contribution to the index from this component for the first time since April 2001. The six-month change in the leading index fell to negative 1.6 percent (about a negative 3.2 percent annual rate) during the six-month span through March, well below the growth of 1.0 percent (about a 2.0 percent annual rate) during the six-month span from March to September 2007. In addition, the weaknesses among the leading indicators have become very widespread.
  • The coincident index, a measure of current economic activity, remained unchanged in March after increasing modestly in the previous three months. Employment and wages and salaries made positive contributions in March while industrial production and personal consumption of manufactured goods contributed negatively. The six-month growth rate of the coincident index declined slightly to 0.5 percent (about a 1.0 percent annual rate) during the six-month span through March, slightly below the six-month growth rate of 0.6 percent (about a 1.2 percent annual rate) during the six-month span from March to September 2007. However, the strengths among the coincident indicators have remained widespread.
  • The leading index has been on a general downtrend since November of 2007. Meanwhile, the coincident index continues to expand, albeit well below the high growth rates reached in the first half of 2007. Real GDP grew at a 2.6 percent annual growth rate during the first quarter of 2008, slightly above the 2.1 percent average annual rate which prevailed during the second half of 2007. The behavior of the composite indexes through early 2008 suggests that although the economy is likely to continue expanding, economic growth is likely to be more moderate in the near term.

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

With the decrease of 0.1 percent in March, the leading index now stands at 128.7 (1990=100). Based on revised data, this index declined 0.5 percent in February and declined 0.5 percent in January. During the six-month span through March, the leading index decreased 1.6 percent, (diffusion index, six-month span equals 7.1 percent).

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

COINCIDENT INDICATORS. Two of the four components of the coincident index increased in March. The positive contributors to the index — in order from the largest positive contributor to the smallest — are employment*, and wage and salaries*. The negative contributors to the index — beginning with the largest negative contributor — are personal consumption and industrial production.

Remaining unchanged in March, the coincident index now stands at 123.3 (1990=100). Based on revised data, this index increased 0.2 percent in February and increased 0.1 percent in January. During the six-month period through March, the coincident index increased 0.5 percent, with three of the four series making a positive contribution (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 May 20, 2008. 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 please visit us here at: http://www.conference-board.org/economics/bci/update.cfm?cid=3.

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

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