Global Business Cycle Indicators
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Released: Friday, December 12, 2014
The Conference Board Leading Economic Index® (LEI) for the U.K. declined 0.3 percent, and The Conference Board Coincident Economic Index® (CEI) increased 0.1 percent in October.
Next month's release will incorporate annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. Also, with this benchmark revision, the base year of the composite indexes will be changed to 2010 = 100 from 2004 = 100. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision.
- The Conference Board LEI for the U.K. decreased again in October, with stock prices, order book volume and volume of expected output making negative contributions. Between April and October 2014, the leading economic index increased 1.3 percent (about a 2.5 percent annual rate), down from its 2.4 percent growth (about a 4.9 percent annual rate) in the previous six months. Meanwhile, the strengths among the leading indicators have become less widespread in the past six months.
- The Conference Board CEI for the U.K., a measure of current economic activity, edged up in October. In the six-month period ending in October 2014, the coincident economic index increased 0.7 percent (about a 1.5 percent annual rate), down from its growth of 1.5 percent (about a 3.1 percent annual rate) over the prior six months. The strengths among the coincident indicators, however, have remained very widespread, with all four components increasing in the recent six months. Meanwhile, real GDP increased 2.7 percent (annual rate) in the third quarter, down from 3.9 percent (annual rate) in the second quarter.
- Following two consecutive monthly declines, the six-month growth rate of the LEI slowed substantially in October, and as a result, its upward trend has moderated. Meanwhile, the CEI has been improving slowly, but its six-month change—while still positive—has eased in recent months. Taken together, the composite indexes suggest that the pace of improvement in economic activity is unlikely to accelerate in the near term.
LEADING INDICATORS. Four of the seven components that make up The Conference Board LEI for the U.K. increased in October. The positive contributors—from the largest positive contributor to the smallest—were the yield spread, productivity for the whole economy*, total gross operating surplus of corporations*, and consumer confidence. The negative contributors—from the largest negative contributor to the smallest—were stock prices, order book volume, and volume of expected output.
With the 0.3 percent decrease in October, The Conference Board LEI for the U.K. now stands at 112.1 (2004=100). Based on revised data, this index declined 0.3 percent in September and increased 0.4 percent in August. During the six-month span through October, the leading economic index increased 1.3 percent, with four of the seven components advancing (diffusion index, six-month span equals 57.1 percent).
COINCIDENT INDICATORS. Three of the four components that make up The Conference Board CEI for the U.K. increased in October. The positive contributors—from the largest positive contributor to the smallest—were employment*, retail sales, and real household disposable income*. Only industrial production declined in October.
With the increase of 0.1 percent in October, The Conference Board CEI for the U.K. now stands at 107.9 (2004=100). Based on revised data, this index increased 0.1 percent in September and increased 0.2 percent in August. During the six-month period through October, the coincident economic index increased 0.7 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).
DATA AVAILABILITY: The data series used to compute The Conference Board Leading Economic Index® (LEI) for the U.K. and The Conference Board Coincident Economic Index® (CEI) for the U.K. reported in this release are those available “as of” 10 A.M. ET on Wednesday, December 10, 2014. Some series are estimated as noted below.
* Series in The Conference Board LEI for the U.K. that are based on our estimates are productivity for the whole economy and total gross operating surplus of corporations. Series in The Conference Board CEI for the U.K. that are based on our estimates are employment and real household disposable income.
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