Global Business Cycle Indicators


Press Release Archive

Released: Wednesday, December 17, 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 reports today that the leading index for France declined 1.9 percent and the coincident index decreased 0.1 percent in October.

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  • The leading index declined sharply in October, the twelfth consecutive monthly decline and the largest since 1973. Stock prices, production expectations, new unemployment claims (inverted), industrial new orders, and building permits all made very large negative contributions. As a result, the leading index declined 4.4 percent during the six-month period ending in October (about a -8.7 percent annual rate), well below the 4.1 percent annual rate of decline between October 2007 and April 2008. In addition, the weaknesses among the leading indicators have become more widespread in recent months.
  • The coincident index also declined in October after remaining unchanged in August and September. Industrial production made the largest negative contribution to the index. Between April and October 2008, the coincident index declined 0.4 percent (about a -0.8 percent annual rate), below the 0.2 percent rate of increase (about a 0.5 percent annual rate) that prevailed during the previous six months. Meanwhile, real GDP declined at a 0.3 percent average annual rate during the second and third quarter of 2008 (including a 0.6 percent annual rate of growth during the third quarter), well below the 1.5 percent average annual rate of growth for the previous two quarters.
  • The leading index has been trending downward for the past year, and weaknesses among its components have remained consistently widespread during this period. In recent months, the pace of this decline has intensified. Subsequently, the coincident index, a measure of current economic activity, has begun to decrease this year, and its six-month change has remained slightly negative since June. The recent behavior of the composite indexes suggests that economic weakness is likely to continue through the end of the year and into the first half of 2009 and that economic conditions could deteriorate further in the near term.

LEADING INDICATORS. One of the seven components of the leading index increased in October. The positive contributor to the index was the yield spread. The negative contributors to the index — beginning with the largest negative contributor — are the stock price index, production expectations, the inverted new unemployment claims, industrial new orders, building permits (residential) and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*.

With the decrease of 1.9 percent in October, the leading index now stands at 122.5 (1990=100). Based on revised data, this index declined 0.6 percent in September and declined 0.4 percent in August. During the six-month span through October, the leading index decreased 4.4 percent, and one of the seven components increased (diffusion index, six-month span equals 14.3 percent).

COINCIDENT INDICATORS. One of the four components of the coincident index increased in October. The positive contributor to the index was the wage and salaries* component. Industrial production, personal consumption and employment*declined in October.

With the decrease of 0.1 percent in October, the coincident index now stands at 122.8 (1990=100). Based on revised data, this index remained unchanged in September and remained unchanged in August. During the six-month period through October, the coincident index decreased -0.4 percent, with four of the four series making a positive contribution (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 15, 2008. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are ratio deflator of manufacturing value added to unit labor cost in manufacturing. Series in the coincident index that are based on The Conference Board estimates are number of employees and wage and salaries.

With the May 2006 release the FRANCE LEADING ECONOMIC INDICATORS AND RELATED COMPOSITE INDEXES underwent a benchmark revision. For more information on these benchmark revisions please visit us here at: