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Benchmark Revisions - January 2008

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Released: Thursday, September 22, 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 July.

  • The Conference Board LEI for Australia declined again in July for the second consecutive month. However, there were large upward revisions to the index in the past several months, as actual data for the (inverted) sales to inventory ratio* and gross operating surplus* for the second quarter became available. Building approvals continued falling strongly in July, more than offsetting positive contributions from the other leading indicators. Despite this month’s small decline, the six-month growth rate in the leading economic index picked up to 0.8 percent (about a 1.5 percent annual rate) through July 2011, from 0.3 percent (about a 0.7 percent annual rate) for the previous six months. Nevertheless, the weaknesses among the leading indicators have become more widespread than the strengths in recent months.
  • The Conference Board CEI for Australia, a measure of current economic activity, also declined slightly in July. Retail trade continued to fall, and employment also contributed to the decline in the index this month. With the small decrease in July, the six-month change in the coincident economic index remained negative, falling by 0.2 percent (about a -0.3 percent annual rate) from January to July, down from the increase of 0.4 percent (about a 0.9 percent annual rate) for the previous six months. At the same time, real GDP increased by 4.8 percent (annual rate) in the second quarter of 2011, up from the contraction of 3.4 percent (annual rate) in the first quarter of this year.
  • The Conference Board LEI for Australia continued to fall in July, and the weaknesses among its components in the last six months have become more widespread. At the same time, The Conference Board CEI for Australia has been on a slightly downward trend since late last year.  Taken together, the current behavior of the composite indexes suggests that economic growth could slow in the near term.

LEADING INDICATORS.  Five of the seven components in The Conference Board LEI for Australia increased in July.  The positive contributors to the index – from the largest positive contributor to the smallest – include gross operating surplus*, money supply*, yield spread, rural goods exports and the sales to inventories ratio*.  Building approvals declined while share prices remained unchanged in July. 

With the 0.1 percent decrease in July, The Conference Board LEI for Australia now stands at 120.5 (2004=100).  Based on revised data, this index declined 0.5 percent in June and increased 0.2 percent in May. During the six-month period through July, the leading economic index increased 0.8 percent, and three of the seven components increased (diffusion index, six-month span equals 42.9 percent).

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

With the decrease of 0.1 percent in July, The Conference Board CEI for Australia now stands at 117.6 (2004=100).  Based on revised data, this index held steady in June and decreased 0.1 percent in May.  During the six-month period through July, the coincident economic index decreased 0.2 percent, with two of the four components 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 September 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 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.

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

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