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Benchmark Revisions - January 2008

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Released: Tuesday, February 19, 2013

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

  • The Conference Board LEI for Australia fell slightly in December for a second consecutive month. The gain in stock prices was more than offset by negative contributions from building approvals and rural goods exports. With the small decline in December, the leading economic index continued on a downward trend, decreasing by 1.2 percent (about a -2.4 percent annual rate) in the second half of 2012, much steeper than the decrease of 0.1 percent (about a -0.2 percent annual rate) during the first half of the year. Moreover, the strengths among the leading indicators have become less widespread than the weaknesses in the last six months.
  • The Conference Board CEI for Australia, a measure of current economic activity, was unchanged in December. During the second half of 2012, the six-month growth rate of the coincident economic index increased by 0.2 percent (about a 0.3 percent annual rate), down from the 1.3 percent increase (about a 2.7 percent annual rate) for the previous six months. Nevertheless, the strengths and weaknesses among the coincident indicators have remained balanced in recent months. Meanwhile, real GDP increased at a 1.9 percent annual rate in the third quarter of 2012, down from 2.3 percent (annual rate) in the second quarter.
  • The LEI for Australia continued to fall in December, and has declined in five of the last six months. As a result, its six-month change remains negative and has deepened since the middle of the year. Meanwhile, the CEI continued its essentially flat trend through December, and its rate of growth has also decelerated from the first half of 2012. Taken together, the composite indexes and their components continue to suggest that the pace of economic growth is likely to slow in the near term.  

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

With the 0.1 percent decrease in December, The Conference Board LEI for Australia now stands at 121.8 (2004=100). Based on revised data, this index declined 0.2 percent in November and increased 0.2 percent in October. During the six-month period through December, the leading economic index decreased 1.2 percent, and three of the seven components increased (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS.  Two of the four components in The Conference Board CEI for Australia increased in December.  The increases — in order from the larger positive contributor to the smaller — occurred in household gross disposable income* and industrial production*. Retail trade and employed persons declined in December.

Holding steady in December, The Conference Board CEI for Australia now stands at 121.6 (2004=100). Based on revised data, this index increased 0.1 percent in November and remained unchanged in October. During the six-month period through December, the coincident economic index increased 0.2 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 February 14, 2012.  Some series are estimated as noted below.

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.

**Starting with the January 2013 release, The Conference Board is using the level of the interest rate yield spread, rather than its monthly change, to calculate the one and six-month diffusion indexes of The Conference Board LEI for Australia.  The calculation of the contribution from the yield spread in the LEI for Australia has also changed. The contribution of this component is now calculated from the monthly value of the yield spread instead of its 3-month moving average.

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

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