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Benchmark Revisions - May 2008

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Released: Monday, November 24, 2008

The Conference Board announced today that the leading index for Mexico declined 1.9 percent and the coincident index remained unchanged in September.

  • The leading index declined sharply in September, its second consecutive steep decline, as a result of very large negative contributions from oil prices, the real exchange rate and stock prices. All of the remaining components also posted declines for the month. Between March and September 2008, the leading index declined 0.8 percent (about a -1.6 percent annual rate), well below the 5.6 percent annual rate of growth for the previous six-month period. In addition, the weaknesses among the leading indicators have become very widespread in recent months.
  • The coincident index, a measure of current economic activity, remained unchanged in September after declining in July and August. Since March 2008, the coincident index declined by 0.1 percent (about a -0.1 percent annual rate), well below the 1.4 percent (about a 2.9 percent annual rate) rate of growth between September 2007 and March 2008. However, strengths have remained more widespread than weaknesses among the coincident indicators over the past six months. Meanwhile, real GDP increased at a 0.1 percent average annual rate in the first half of 2008 (including a 0.6 percent annual rate of growth in the second quarter), well below the 4.2 percent average annual rate of growth in the second half of 2007.
  • As a result of two consecutive sharp declines in the leading index, its six-month growth rate has turned negative for the first time since late 2006. At the same time, the six-month growth rate of the coincident index has gradually slowed and dropped below zero in the last two months. Taken together, the recent behavior of the composite indexes suggest slow economic growth going forward and increasing risks of further economic weakness in the near term.

LEADING INDICATORS. None of the six components that make up the leading index increased in September. The negative contributors to the index-from the largest negative contributor to the smallest one-are the US refiners' acquisition cost of domestic and imported crude oil, the (inverted) real exchange rate, stock prices, net insufficient inventories, the industrial production construction component and the (inverted) federal funds rate.

With the 1.9 percent decrease in September, the leading index now stands at 168.4 (1990=100). Based on revised data, this index declined 1.1 percent in August and increased 0.1 percent in July. During the six-month span through September, the index decreased 0.8 percent, with two of the six components increasing (diffusion index, six-month span equals 33.3 percent).

COINCIDENT INDICATORS. One of the three components that make up the coincident index increased in September. The number of people employed, measured by total IMSS beneficiaries, increased in September. Industrial production and retail sales *declined.

Remaining unchanged in September, the coincident index now stands at 168.9 (1990=100). Based on revised data, this index decreased 0.2 percent in August and decreased 0.5 percent in July. During the six-month span through September, the index decreased -0.1 percent, with two of the three components increasing (diffusion index, six-month span equals 66.7 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. November 20, 2008. Some series are estimated as noted below.

NOTES: The series in the coincident index based on The Conference Board estimates include retail sales.

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

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