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Benchmark Revisions - September 2005

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Released: Thursday, September 13, 2012

The Conference Board Leading Economic Index® (LEI) for Korea remained unchanged and The Conference Board Coincident Economic Index® (CEI) for Korea increased 0.3 percent in July.

  • The Conference Board LEI for Korea held steady in July following two consecutive declines. Positive contributions from value of machinery orders and the (inverted) bond yield offset a large negative contribution from letter of credit arrivals. Between January and July 2012, the leading economic index contracted by 0.6 percent (about a -1.2 percent annual rate), about the same rate of decline as during the previous six months.  Additionally, the weaknesses among the leading indicators have become more widespread than the strengths in the last six months.
  • The Conference Board CEI for Korea, a measure of current economic activity, increased in July. Despite this month’s small gain, the six-month growth rate of the coincident economic index continued to slow, to 1.0 percent (about a 2.1 percent annual rate) between January and July 2012, down from an increase of 1.4 percent (about a 2.8 percent annual rate) during the previous six months. At the same time, real GDP grew at a 1.1 percent annual rate in the second quarter of 2012, down from 3.5 percent (annual rate) in the first quarter.  
  • The Conference Board LEI for Korea was unchanged in July after having declined in three of the last four months. As a result, its six-month growth rate – which has been slowing at a relatively steady pace since the beginning of the year – has now moved into negative territory. Meanwhile, The Conference Board CEI for Korea increased slightly in July, but its six-month growth rate has also slowed compared to earlier this year. Taken together, the composite indexes and their components suggest that while it’s too early to say the economic expansion will end, the risk of a slowdown in the near term is rising.

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

Holding steady in July, The Conference Board LEI for Korea now stands at 119.2 (2004=100).  Based on revised data, this index declined 0.7 percent in June and declined 1.1 percent in May. During the six-month span through July, the leading economic index decreased 0.6 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 July. The positive contributors – in order from the largest positive contributor to the smallest – were the wholesale and retail sales component, total employment, and monthly cash earnings*. Industrial production declined in July.

With the 0.3 percent increase in July, The Conference Board CEI for Korea now stands at 118.1 (2004=100). Based on revised data, this index decreased 0.4 percent in June and increased 0.6 percent in May. During the six-month span through July, the coincident economic index increased 1.0 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 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 September 13, 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.

NOTE: Beginning with this release, several data series in both The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for Korea will now be provided by Haver Analytics. As a result, some data series have been revised, but these changes do not affect the overall cyclical properties of the indexes.  For more information about these changes please contact indicators@conferenceboard.org.

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

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