Global Business Cycle Indicators


Press Release Archive

Released: Thursday, December 4, 2008

Next month's release will incorporate annual benchmark revisions to the composite indexes, which bring them up-to-date with revisions in the source data. Also, the base year of the composite indexes will be changed to 2004=100 from 1990=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 will no longer be comparable to those issued prior to the benchmark revision.

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The Conference Board announced today that the leading index for the U.K declined 1.7 percent, and the coincident index increased 0.1 percent in October.

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  • The leading index fell sharply again in October, as a result of very large negative contributions from stock prices, order book volume, and the volume of expected output. Since April, the leading index has decreased 5.7 percent (a -11.1 percent annual rate), falling substantially faster than the 2.6 percent rate of decline (a -5.2 percent annual rate) during the previous six-month period. In addition, the weaknesses among the leading indicators continue to be very widespread.
  • The coincident index increased slightly in October, after remaining unchanged in the previous two months. The six-month change in the coincident index has fallen to -0.1 percent (a -0.2 percent annual rate) for the period ending in October 2008, down from 0.7 percent (a 1.3 percent annual rate) between October 2007 to April 2008. However, the strengths and weaknesses among the coincident indicators have remained balanced in recent months. Meanwhile, real GDP contracted at a 2.1 percent annual rate in the third quarter, the first time since the early 1990's that its growth rate has turned negative.
  • The leading index has been falling for more than a year now, and the pace of its decline has picked up sharply in recent months, while the weaknesses among its components have remained very widespread. The coincident index, a measure of current economic activity, has weakened this year, with the six-month rate of change becoming negative. The accelerating and widespread decline in the leading index suggests that the economy will remain weak going into 2009, and that the contraction in economic activity may deepen in the near term.

LEADING INDICATORS. Two of the seven components that make up the leading index increased in October. The positive contributors — from the larger positive contributor to the smaller — were productivity for the whole economy* and operating surplus of corporations. The negative contributors — from the largest negative contributor to the smallest — were stock prices, order book volume, volume of expected output, and consumer confidence. The yield spread remained unchanged in October.

With the 1.7 percent decrease in October, the leading index now stands at 118.7 (1990=100). Based on revised data, this index declined 1.1 percent in September and declined 0.6 percent in August. During the six-month span through October, the leading index decreased 5.7 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in October. The positive contributors — from the largest positive contributor to the smallest — were employment *, real household disposable income*, and industrial production. Retail sales declined in October.

With the increase of 0.1 percent in October, the coincident index now stands at 120.1 (1990=100). Based on revised data, this index remained unchanged in September and in August. During the six-month period through October, the coincident 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 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 December 2, 2008. Some series are estimated as noted below.

* Series in the leading index that are based on The Conference Board estimates are productivity of the whole economy, 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.


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Technical Notes
Underlying detail, diffusion indexes, components, contributions and graphs

Press Release
With graph and summary table

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