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Benchmark Revisions - January 2008

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Released: Monday, July 25, 2011

The Conference Board Leading Economic Index® (LEI) for Australia declined 0.1 percent and The Conference Board Coincident Economic Index® (CEI) also declined 0.1 percent in May.

  • The Conference Board LEI for Australia declined slightly in May following a small gain in April. Building approvals and stock prices made the largest negative contributions to the index this month. With the decline, the six-month change in the leading economic index remained negative — it stands at -0.7 percent (a -1.5 percent annual rate) in the period through May 2011, down from 1.6 percent (a 3.2 percent annual rate) for the previous six months. Still, the strengths among the leading indicators have remained more widespread than the weaknesses in recent months.
  • The Conference Board CEI for Australia, a measure of current economic activity, also declined slightly in May. Industrial production and retail trade both fell this month. The six-month change in the coincident economic index has also turned negative — to a 0.1 percent decline (a -0.2 percent annual rate) for the period ending in May 2011, down from 1.1 percent (a 2.2 percent annual rate) for the previous six months. At the same time, real GDP contracted by 4.7 percent (annual rate) in the first quarter of this year, down from the increase of 3.3 percent annual rate in the last quarter of 2010.
  • The Conference Board LEI for Australia continued its slightly downward trend that started at the beginning of this year, and its six-month growth rate remains negative as a result. At the same time, The Conference Board CEI for Australia has declined for two consecutive months through May, and its six-month growth rate has turned negative for the first time since late 2009. Taken together, the current behavior of the composite indexes suggests that economic activity will remain slow in the near term.

LEADING INDICATORS. Three of the seven components in The Conference Board LEI for Australia increased in May. The positive contributors to the index — in order from the largest positive contributor to the smallest — are money supply*, rural goods exports, and the yield spread. Building approvals, share prices, the sales to inventories ratio*, and gross operating surplus* declined in May.

With the 0.1 percent decrease in May, The Conference Board LEI for Australia now stands at 119.3 (2004=100). Based on revised data, this index increased 0.2 percent in April and declined 0.3 percent in March. During the six-month period through May, the leading economic index decreased 0.7 percent, and four of the seven components increased (diffusion index, six-month span equals 64.3 percent).

COINCIDENT INDICATORS. One of the four components in The Conference Board CEI for Australia increased in May. The increase occurred in household gross disposable income*. Retail trade and industrial production* declined, while employed persons remained unchanged in May.

With the decrease of 0.1 percent in May, The Conference Board CEI for Australia now stands at 117.8 (2004=100). Based on revised data, this index decreased 0.1 percent in April and increased 0.2 percent in March. During the six-month period through May, the coincident economic index decreased 0.1 percent, with two of the four components in the series making positive contributions (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY. The data series used to compute The Conference Board Leading Economic Index® (LEI) for Australia and The Conference Board Coincident Economic Index® (CEI) for Australia reported in this release are those available “as of” 10 A.M. ET on July 21, 2011. Some series are estimated as noted below.

NOTES: Series in The Conference Board LEI for Australia that are based on our estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals, and the CPI used to deflate money supply M3. Series in The Conference Board CEI for Australia that are based on our estimates are industrial production and household disposable income. CPI was used to deflate retail trade.

Effective with the February 26, 2009 release, the seasonally adjusted retail trade data replaced the trend estimated series, the publication of which was suspended by the Australia Bureau of Statistics.

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

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