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Benchmark Revisions - January 2008

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Released: Thursday, March 21, 2013

The Conference Board Leading Economic Index® (LEI) for Australia increased 0.2 percent and The Conference Board Coincident Economic Index® (CEI) increased 0.1 percent in January.

  • The Conference Board LEI for Australia increased slightly in January after declining in the previous two months. Stock prices and money supply made the largest positive contributions to the index this month. Despite the small gain in January, the leading economic index continued on a downward trend, falling 1.0 percent (about a -1.9 percent annual rate) between July 2012 and January 2013, slightly steeper than the decrease of 0.8 percent (about a -1.6 percent annual rate) during the previous six months. Moreover, the weaknesses among the leading indicators have remained more widespread than the strengths in recent months.
  • The Conference Board CEI for Australia, a measure of current economic activity, also increased slightly in January. Despite the increase, the coincident economic index was flat between July 2012 and January 2013, down from the 1.1 percent increase (about a 2.2 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 2.4 percent annual rate in the fourth quarter of 2012, slightly down from the 2.6 percent (annual rate) in the third quarter of the year.
  • The LEI for Australia increased slightly in January, but it has declined in four of the last six months. As a result, the six-month change in the LEI remains negative. Meanwhile, the CEI remained on an essentially flat trend through January, and its rate of growth has continued to slow. Taken together, despite small monthly gains in both the LEI and CEI, the recent behavior of the composite indexes and their components suggests that the pace of economic growth could slow in the near term.  

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

With the 0.2 percent increase in January, The Conference Board LEI for Australia now stands at 121.9 (2004=100). Based on revised data, this index declined 0.2 percent in both December and November. During the six-month period through January, the leading economic index decreased 1.0 percent, and two of the seven components increased (diffusion index, six-month span equals 28.6 percent).
    

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

With the increase of 0.1 percent in January, The Conference Board CEI for Australia now stands at 121.5 (2004=100). Based on revised data, this index decreased 0.1 percent in December and increased 0.1 percent in November. During the six-month period through January, the coincident economic index was flat, 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 March 20, 2013.  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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