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Benchmark Revisions - March 2007

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Released: Wednesday, June 18, 2008

The Conference Board announced today that the leading index for Germany declined 0.2 percent, while the coincident index increased 0.1 percent in April.

  • Following three consecutive large declines, the leading index decreased modestly in April, and it was revised down slightly from December through March after quarterly data for inventory change and gross enterprises and properties income became available. In April, stock prices and consumer confidence made large positive contributions, but they were not enough to offset the large negative contributions from new orders in investment goods industries and the yield spread — the only two components that declined in April. Since October, the leading index has dropped by 3.4 percent (about a -6.7 percent annual rate), well below the recent peak of 2.4 percent growth reached in June of 2007 (about a 4.8 percent annual rate). Additionally, the weaknesses among the leading indicators have been very widespread in recent months.
  • The coincident index, a measure of current economic activity, increased slightly in April, but was revised down in March as a result of data revisions in retail trade and industrial production. In April, manufacturing sales was the largest positive contributor, while industrial production was the largest negative contributor. Between October 2007 and April 2008, the coincident index has grown by 0.9 percent (about a 1.8 percent annual rate), below its growth rate at the beginning of the year. In addition, the strengths among the coincident indicators have been more widespread than the weaknesses in recent months.
  • After growing at a fairly strong pace during the first half of 2007, the leading index has fallen rapidly since July 2007 with widespread weakness among its components. Although the coincident index continued to grow steadily through February 2008, its growth rate moderated in the last two months. At the same time, real GDP growth picked up to a 3.6 percent average annual growth rate for the last two quarters (including a 6.3 percent annual rate for the first quarter of 2008), up from a 1.7 percent average annual growth rate for the second and third quarters of 2007. The weakness in the leading index since mid-2007 suggests that the recent pick up in economic growth is not likely to persist in the near term.

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

With the 0.2 percent decrease in April, the leading index now stands at 96.0 (1990=100). Based on revised data, this index declined 0.7 percent in March and declined 0.8 percent in February. During the six-month span through April, the leading index decreased 3.4 percent, with one of the seven components increasing (diffusion index, six-month span equals 14.3 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in April. The positive contributors to the coincident index were manufacturing sales and employed persons. Industrial production and retail trade declined in April.

With the 0.1 percent increase in April, the coincident index now stands at 110.9 (1990=100). Based on revised data, this index decreased 0.3 percent in March and increased 0.4 percent in February. During the six-month period through April, the coincident index increased 0.9 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 June 16, 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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