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Benchmark Revisions - March 2007

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Released: Tuesday, April 22, 2008

The Conference Board announced today that the leading index for Germany declined 0.9 percent and the coincident index increased 0.1 percent in February.

  • In February, the leading index fell sharply again as stock prices, new orders in investment goods and consumer confidence all made large negative contributions to the index. In the six months since August 2007, the leading index has declined by 2.6 percent (about a -5.1 percent annual rate), down substantially from the first half of 2007 when its six-month growth rate reached about 4.5 to 5.0 percent (annual rate). The leading index has been down or flat in five of the last six months, and the weaknesses among the leading indicators have become more widespread than the strengths in recent months.
  • The coincident index, a measure of current economic activity, increased again in February. Positive contributions from employed persons and manufacturing sales more than offset a large decline in retail sales. Between August 2007 and February 2008, the coincident index increased by 0.8 percent (about a 1.6 percent annual rate), essentially the same as in the previous six months. In addition, the strengths among the coincident indicators have remained more widespread than the weaknesses in recent months.
  • After fluctuating around a slightly rising trend from February 2006 through July 2007, the leading index has fallen sharply in the past seven months. The coincident index has continued to grow steadily in recent months, but its growth rate has declined since the first quarter of 2007. At the same time, real GDP growth has slowed to a 1.1 percent annual rate during the fourth quarter, below the 1.7 percent average annual rate for the second and third quarters. The recent behavior of the leading and coincident indexes so far continues to suggest that the German economy is likely to continue growing at a slow pace in the near term.

LEADING INDICATORS. Two of the seven components in the leading index increased in February. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — are inventory change series*, and gross enterprises and properties income*. Negative contributors — in order from largest to smallest — are stock prices, new orders in investment goods industries, consumer confidence, yield spread, and new residential construction orders*.

With the 0.9 percent decrease in February, the leading index now stands at 97.2 (1990=100). Based on revised data, this index declined 0.9 percent in January and remained unchanged in December. During the six-month span through February, the leading index decreased 2.6 percent, with two of the eight components increasing (diffusion index, six-month span equals 28.6 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in February. The positive contributors to the coincident index were manufacturing sales, employed persons, and industrial production. Retail trade declined in February.

With the 0.1 percent increase in February, the coincident index now stands at 110.6 (1990=100). Based on revised data, this index increased 0.4 percent in January and increased 0.2 percent in December. During the six-month period through February, the coincident index increased 0.8 percent, with three of the four components increasing (diffusion index, six-month span equals 75.0 percent).

DATA AVAILABILITY The data series used to compute the two composite indexes reported in this release are those available "as of" 10:00 A.M. ET April 18, 2008. Some series are estimated as noted below.

NOTES: Series in the leading index for Germany that are based on The Conference Board estimates are inventory change, new residential construction orders, and gross enterprises and properties income. There are no series in the coincident index for Germany that are based on The Conference Board estimates.

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

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