Global Business Cycle Indicators


Press Release Archive

Released: Wednesday, July 16, 2003

The Conference Board announced today that the leading index for the U.K. increased 0.6 percent, and the coincident index increased 0.1 percent in May.

  • May’s increase in the leading index is the largest since August of last year. Moreover, the one-month diffusion index, which measures the proportion of the components that are rising, is now above 50 percent for the first time since November last year suggesting the strength in the leading indicators has become more widespread. Consumer confidence and stock prices, which were very weak early in the year, made the largest positive contributions in May.
  • Modest gains in employment, industrial production and household disposable income pushed the coincident index up in May. This index has been flat or up slightly in the last four months.
  • Similar to what is occurring in other countries, weakness in the U.K. leading index appears to be coming to an end. This pattern is consistent with a slight improvement in near-term economic growth, but whether this is the beginning of a sustained upturn remains to be seen.

Leading Indicators. Five of the nine components that make up the leading index increased in May. The positive contributors – from the largest positive contributor to the smallest – were stock prices, consumer confidence, productivity for the whole economy*, fixed interest price index, and order book volume. The two negative contributors to the index – beginning with the larger negative contributor – were volume of expected output and new orders for engineering industries*. Housing starts* and operating surplus of corporations* were unchanged in May.

With the 0.6 percent increase in May, the leading index now stands at 123.6 (1990=100). Based on revised data, this index held steady in April and decreased 0.6 percent in March. During the six-month span through May, the leading index decreased 1.3 percent with four of the nine components advancing (diffusion index, six-month span equals 44.4 percent).

Coincident Indicators. Three of the four components that make up the coincident index increased in May. Employment* was the largest contributor, followed by real household disposable income*, and industrial production. Retail sales held steady in May.

With a 0.1 percent increase in May, the coincident index now stands at 114.2 (1990=100). This index increased 0.2 percent in April and held steady in March. During the six-month period through May, the coincident index increased 0.4 percent, with three of the four components advancing (diffusion index, six-month span equals 75 percent).

Data Availability. The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available “as of” 10 A.M. ET on July 15, 2003. Some series are estimated as noted below.

*Notes: Series in the leading index that are based on The Conference Board estimates are new orders in engineering industries, productivity of the whole economy, housing starts, and operating surplus of corporations. Series in the coincident index that are based on The Conference Board estimates are employment and real household disposable income.