Global Business Cycle Indicators
|Benchmark Revisions - July 2007|
Press Release Archive
Released: Tuesday, January 13, 2009
This month's release incorporates annual benchmark revisions to the composite economic indexes, which bring them up-to-date with revisions in the source data. Also, the base year of the composite economic indexes has been 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 not be comparable to those issued prior to the benchmark revision.
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The Conference Board Leading Economic Index (LEI) for the U.K. declined 1.0 percent, and The Conference Board Coincident Economic Index (CEI) remained unchanged in November.
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- The leading economic index has now fallen for more than a year, as order book volume and the volume of expected output continued to make very large negative contributions in November. Since May 2008, the LEI has decreased 6.3 percent (about a -12.3 percent annual rate), well below the 2.7 percent decline (about a -5.3 percent annual rate) between November 2007 and May 2008. In addition, the weaknesses among the leading indicators continue to be very widespread.
- The coincident economic index, a measure of current economic activity, remained unchanged in November. In the six months from May to November, the CEI has fallen by 0.4 percent (about a 0.8 percent annual rate), a sharp reversal from its 0.5 percent increase (about a 1.0 percent annual rate of growth) during the previous six months. At the same time, the weaknesses among the coincident indicators have become more widespread. In addition, real GDP contracted at a 2.5 percent annual rate (revised) in the third quarter, the first time since the early 1990s that its growth rate has turned negative.
- The leading economic index has been declining since October of 2007, and in recent months the pace of this decline has picked up sharply and its six month growth rate has reached its lowest point since 1980. The coincident economic index has declined slightly since May. The accelerating and widespread decline in LEI suggests that the economy will remain weak in the near term, and that the contraction in economic activity is likely to become deeper.
LEADING INDICATORS. Three of the seven components that make up the leading economic index increased in November. The positive contributors — from the largest positive contributor to the smallest — were yield spread, productivity for the whole economy* and operating surplus of corporations*. The negative contributors — from the largest negative contributor to the smallest — were order book volume, volume of expected output, consumer confidence, and stock prices.
With the 1.0 percent decrease in November, the leading economic index now stands at 94.4 (2004=100). Based on revised data, this index declined 1.8 percent in October and declined 1.2 percent in September. During the six-month span through November, the leading index decreased 6.3 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 economic index increased in November. The positive contributors — from the largest positive contributor to the smallest — were employment*, real household disposable income*, and retail sales. Industrial production declined in November.
After remaining unchanged in November, the coincident economic index now stands at 103.9 (2004=100). Based on revised data, this index decreased 0.1 percent in October and remained unchanged in September. During the six-month period through November, the coincident index decreased 0.4 percent, with one of the four components advancing (diffusion index, six-month span equals 25.0 percent).
DATA AVAILABILITY: The data series used by The Conference Board 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 Friday January 9, 2009. Some series are estimated as noted below.
* Series in the leading economic index that are based on The Conference Board estimates are productivity of the whole economy, and operating surplus of corporations. Series in the coincident economic index that are based on The Conference Board estimates are employment and real household disposable income.
THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.