Global Business Cycle Indicators

Korea

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Released: Thursday, June 13, 2013

The Conference Board Leading Economic Index® (LEI) for Korea declined 0.5 percent and The Conference Board Coincident Economic Index® (CEI) for Korea increased 0.3 percent in April.

• The Conference Board LEI for Korea fell in April, with real exports, letter of credit arrivals, and the stock price index declining. With this month’s decrease, the leading economic index fell by 0.3 percent (about a -0.7 percent annual rate) in the six-month period ending April 2013, only slightly up from the decline of 0.7 percent (about a -1.3 percent annual rate) for the previous six months. Additionally, the weaknesses among the leading indicators have become more widespread than the strengths in the last six months.
• The Conference Board CEI for Korea, a measure of current economic activity, increased in April. Between October 2012 and April 2013, the coincident economic index declined by 0.1 percent (about a -0.2 percent annual rate), down from the increase of 0.8 percent (about a 1.6 percent annual rate) during the previous six months. However, the strengths and the weaknesses among the leading indicators have become balanced in the last six months. At the same time, real GDP grew at a 3.4 percent annual rate in the first quarter of 2013, up from 1.1 percent (annual rate) in the last quarter of 2012.  
• The LEI for Korea fell in April and has declined in three of the last four months, with its six-month growth rate turning negative. Meanwhile, the CEI for Korea has increased in three of the last four months, but the gain was offset by a large decline in February. As a result, its six-month change has remained in negative territory. Taken together, the recent volatile behavior in both the LEI and CEI suggest that the current rate of economic expansion is likely to slow in the near term.

LEADING INDICATORS.Three of the seven components that make up The Conference Board LEI for Korea increased in April. The positive contributors – from the largest positive contributor to the smallest – were private construction orders, the (inverted) index of inventories to shipments, and the (inverted) yield of government public bonds.  Negative contributors – from the largest negative contributor to the smallest – were real exports FOB, letter of credit arrivals, and stock prices.  Value of machinery orders was unchanged in April.

With the 0.5 percent decrease in April, The Conference Board LEI for Korea now stands at 120.9 (2004=100).  Based on revised data, this index increased 1.2 percent in March and declined 0.5 percent in February.  During the six-month span through April, the leading economic index decreased 0.3 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).
    

COINCIDENT INDICATORS.  Three of the four components that make up The Conference Board CEI for Korea increased in April.  The positive contributors – in order from the largest positive contributor to the smallest – were total employment, the wholesale and retail sales component, and industrial production.   Monthly cash earnings* declined in April.

With the 0.3 percent increase in April, The Conference Board CEI for Korea now stands at 116.7 (2004=100).  Based on revised data, this index increased 0.6 percent in March and decreased 1.6 percent in February. During the six-month span through April, the coincident economic index decreased 0.1 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY.  The data series used to compute The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for Korea reported in this release are those available “as of” 10 A.M. (ET) on June 12, 2013.  

* The series in the coincident economic index based on The Conference Board’s estimates is monthly cash earnings.  There is no forecasted series in the leading economic index.

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