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Benchmark Revisions - September 2005

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Released: Tuesday, June 10, 2008

The Conference Board announced today that the leading index for Korea increased 0.1 percent and the coincident index increased 0.3 percent in April.

  • The leading index increased slightly in April, offsetting an equally small decline in March. Positive contributions from the stock price index, real exports, and construction orders offset declines in value of machinery orders, letter of credit arrivals, and index of inventories to shipments (inverted). Despite April's slight increase, the leading index fell at about a -2.2 percent rate (a -4.4 percent annual rate) between October 2007 to April 2008, down from a growth rate of 5.1 percent (about a 10.5 percent annual rate) reached between April and October 2007. In addition, the weaknesses among the leading indicators have become very widespread during the last six months.
  • The coincident index also increased in April, and all of its components contributed to this gain. With April's modest gain, the growth of the coincident index picked up slightly from the first two months of the year to a 1.1 percent rate (a 2.2 percent annual rate) between October 2007 and April 2008, but it is still below the 1.9 percent growth between April 2007 and October 2007. In addition, the strengths among the coincident indicators have been widespread in recent months.
  • The leading index gained slightly in two of the last six months and it continues along a downward trend that began in October 2007, and its rate of decline has accelerated in recent months. At the same time, real GDP grew at a 3.3 percent annual rate (revised) in the first quarter of 2008, well below the 6.2 percent average annual rate in the second half of 2007. Taken together, the recent weakening of the leading index and moderating in the growth of the coincident index suggests that slow to moderate economic growth is likely to continue in the near term.

LEADING INDICATORS. Four of the seven components that make up the leading index increased in April. The positive contributors — from the largest positive contributor to the smallest — were stock prices, real exports FOB, private construction orders, and the (inverted) yield of government public bonds. Negative contributors — from the largest negative contributor to the smallest — were letter of credit arrivals, value of machinery orders, and the (inverted) index of inventories to shipments.

With the 0.1 percent increase in April, the leading index now stands at 176.6 (1990=100). Based on revised data, this index declined 0.1 percent in March and declined 1.4 percent in February. During the six-month span through April, the leading index decreased 2.2 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).

COINCIDENT INDICATORS. All four components that make up the coincident index increased in April. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — were industrial production, the wholesale and retail sales component, total employment, and monthly cash earnings.

With the 0.3 percent increase in April, the coincident index now stands at 172.2 (1990=100). Based on revised data, this index increased 0.3 percent in March and increased 0.2 percent in February. During the six-month span through April, the coincident index increased 1.1 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in this release are those available "as of" 10 A.M. (ET) on June 9, 2008.

* The series in the coincident index based on The Conference Board's estimates is monthly cash earnings. There is no forecasted series in the leading index.

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

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