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Benchmark Revisions - September 2005

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Released: Tuesday, February 10, 2009

The Conference Board Leading Economic Index (LEI) for Korea declined 1.5 percent and The Conference Board Coincident Economic Index (CEI) declined 1.3 percent in December.

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Download a PDF of the press release in Korean.

  • The LEI for Korea fell again in December, following the largest monthly decline of more than ten years in November. Letter of credit arrivals made a very large negative contribution to the LEI this month, more than offsetting the large positive contributions from private construction orders, yield of government public bonds, and index of inventories to shipments. The six-month growth rate for the LEI has fallen to -10.4 percent (about a -19.8 percent annual rate) from June to December 2008, the lowest point since 1998 during the Asian financial crises. In addition, the weaknesses among the LEI components have remained widespread during the last six months.
  • The CEI for Korea, a measure of current economic activity, also fell sharply in December, and the weaknesses among its components continued to be widespread. Industrial production fell sharply again this month, while wholesale and retail sales, and total employment also declined. With December's decline, the CEI has fallen by 3.7 percent (a -7.2 percent annual rate) during the last six months, well below the 0.3 percent decrease between December 2007 and June 2008. At the same time, real GDP registered its sharpest decrease since 1998 — a 20.8 percent annual rate of decline in the fourth quarter of 2008, resulting in a 3.0 percent average annual rate of decline for 2008.
  • The LEI for Korea has been declining for more than a year now, and its rate of decline has accelerated in the second half of 2008. The CEI for Korea has also weakened substantially this year, and its rate of decrease also picked up in recent months. Taken together, the persistent and widespread deterioration in both the LEI and CEI suggest that the contraction in economic activity in Korea is likely to continue at least through the first half of 2009.

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

With the 1.5 percent decrease in December, the leading economic index now stands at 101.4 (2004=100). Based on revised data, this index declined 4.2 percent in November and declined 3.0 percent in October. During the six-month span through December, the leading economic index decreased 10.4 percent, with only one of the seven components advancing (diffusion index, six-month span equals 14.3 percent).

COINCIDENT INDICATORS. Only one of the four components that make up the coincident economic index increased in December. The positive contributor to the coincident economic index was monthly cash earnings. Industrial production, the wholesale and retail sales component, and total employment declined in December.

With the 1.3 percent decrease in December, the coincident economic index now stands at 104.9 (2004=100). Based on revised data, this index decreased 1.7 percent in November and decreased 0.7 percent in October. During the six-month span through December, the coincident economic index decreased 3.7 percent, with one of the four components advancing (diffusion index, six-month span equals 25.0 percent).

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

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