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Released: Thursday, February 16, 2012

The Conference Board Leading Economic Index® (LEI) for Korea increased 0.4 percent and The Conference Board Coincident Economic Index® (CEI) for Korea increased 0.2 percent in December.

  • The Conference Board LEI for Korea increased in December, led by large gains in exports and value of machinery orders. Despite the increase, the six-month change in the leading economic index remained negative, at -1.0 percent (about a -2.0 percent annual rate) in the second half of 2011, a reversal from the increase of 1.3 percent (about a 2.5 percent annual rate) for the previous six months. In addition, the weaknesses among the leading indicators have been more widespread than the strengths in the last six months.
  • The Conference Board CEI for Korea, a measure of current economic activity, increased again in December for the third consecutive month.  All coincident indicators except industrial production advanced this month. Despite the small gain in December, the six-month growth rate of the coincident economic index continued to slow, to 0.8 percent (about a 1.6 percent annual rate) between June and December 2011, down from the 3.2 percent increase (about a 6.6 percent annual rate) during the first half of the year.  Nevertheless, the strengths among the coincident indicators have remained very widespread in recent months. At the same time, real GDP grew at a 1.4 percent (annual rate) in the fourth quarter of 2011, down from the 3.3 percent growth (annual rate) in the third quarter this year. 
  • The Conference Board LEI for Korea has been fluctuating around a downward trend since early 2011, and its six-month growth rate has remained negative through the end of 2011. Meanwhile, the six-month growth rate of The Conference Board CEI for Korea has also moderated since mid-2011. Taken together, the recent behavior of the composite indexes suggests that economic activity is likely to moderate in the near term, and that risk of a further slowing in growth is rising.

LEADING INDICATORS.  Three of the seven components that make up The Conference Board LEI for Korea increased in December. The positive contributors – from the largest positive contributor to the smallest – were real exports fob, value of machinery orders, and the (inverted) yield of government public bonds.  Negative contributors – from the largest negative contributor to the smallest – were letter of credit arrivals, the (inverted) index of inventories to shipments, stock prices, and private construction orders.    

With the 0.4 percent increase in December, The Conference Board LEI for Korea now stands at 119.6 (2004=100).  Based on revised data, this index declined 0.9 percent in November and increased 0.1 percent in October.  During the six-month span through December, the leading economic index decreased 1.0 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS.  Three of the four components that make up The Conference Board CEI for Korea increased in December.  The positive contributors – in order from the largest positive contributor to the smallest – were total employment, the wholesale and retail sales component, and monthly cash earnings*. Industrial production declined in December.

With the 0.2 percent increase in December, The Conference Board CEI for Korea now stands at 116.1 (2004=100).  Based on revised data, this index increased 0.2 percent in November and increased 0.8 percent in October. During the six-month span through December, the coincident economic index increased 0.8 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY.  The data series used to compute The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for Korea reported in this release are those available “as of” 10 A.M. (ET) on February 14, 2012.  

* 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.

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