Global Business Cycle Indicators
|Benchmark Revisions - September 2005|
Press Release Archive
Released: Tuesday, January 13, 2009
This month's release incorporates annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. Also, the base year of the composite economic indexes has been changed to 2004=100 from 1990=100. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes will not be comparable to those issued prior to the benchmark revision.
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The Conference Board Leading Economic Index (LEI) for Korea declined 3.5 percent and The Conference Board Coincident Economic Index (CEI) declined 1.7 percent in November.
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- The leading economic index fell sharply again in November, the largest monthly decline in more than ten years, as real exports and the (inverted) index of inventories to shipments made very large negative contributions. The six-month growth rate for LEI fell to -10.0 percent (about a -19.0 percent annual rate), well below the 6.3 percent decrease (annual rate) in the previous six months. In addition, the weaknesses among the leading indicators were very widespread as none of the components made positive net contributions during the last six months.
- The coincident economic index also fell sharply in November, due to large declines in industrial production and the wholesale and retail sales components. With November's decline, this index of current economic activity has fallen by 3.0 percent (a -5.9 percent annual rate) from May to November, a sharp reversal from the 1.1 percent increase (annual rate) from November 2007 to May 2008. Moreover, the weaknesses among the CEI components continued to be very widespread during the last six months. At the same time, real GDP growth has slowed to a 2.1 percent annual rate in the third quarter of 2008, down from the 3.3 percent average annual rate during the first half of 2008.
- The rate of deterioration in the leading index has accelerated in recent months, after a brief rebound in July. The monthly declines in the last two months were the largest since the 1997-98 Asian financial crises. The coincident index has also weakened substantially this year, with its rate of decrease having picked up in recent months. Taken together, the persistent and widespread weaknesses in both the LEI and CEI suggest that economic activity is likely to remain very sluggish in the near term, and the risk for further economic weakness remains elevated.
LEADING INDICATORS. All seven components that make up the leading economic index decreased in November. The negative contributors — from the largest negative contributor to the smallest — were real exports FOB, the (inverted) index of inventories to shipments, value of machinery orders, letter of credit arrivals, private construction orders, stock prices, and the (inverted) yield of government public bonds.
With the 3.5 percent decrease in November, the leading index now stands at 103.7 (2004=100). Based on revised data, this index declined 3.0 percent in October and declined 0.7 percent in September. During the six-month span through November, the leading index decreased 10.0 percent, with none of the seven components advancing (diffusion index, six-month span equals 0.0 percent).
COINCIDENT INDICATORS. Only one of the four components that make up the coincident economic index increased in November. The positive contributor was monthly cash earnings. Industrial production, the wholesale and retail sales component, and total employment declined in November.
With the 1.7 percent decrease in November, the coincident index now stands at 106.3 (2004=100). Based on revised data, this index decreased 0.6 percent in October and decreased 0.4 percent in September. During the six-month span through November, the coincident index decreased 3.0 percent, with one of the four components advancing (diffusion index, six-month span equals 25.0 percent).
DATA AVAILABILITY. The data series used to compute The Conference Board Leading Economic Index (LEI) for Korea and The Conference Board Coincident Economic Index (CEI) reported in this release are those available "as of" 10 A.M. (ET) on January 12, 2009.
* The series in the coincident economic index based on The Conference Board's estimates is monthly cash earnings. There is no forecasted series in the leading economic index.
THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.