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Benchmark Revisions - March 2007

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Released: Wednesday, February 20, 2008

The Conference Board announced today that the leading index for Germany remained unchanged and the coincident index remained unchanged in December.

  • In December, the leading index remained unchanged as moderate negative contributions by new residential construction orders, the yield spread, and the consumer confidence index were offset by the large positive contribution made by new orders in investment goods industries. The index was revised downward for November as new data showing a large decline in new residential construction orders became available. During the past six months, the leading index has fallen by 0.8 percent (about a -1.6 percent annual rate), a large decline from a 4.8 percent annual growth rate for the first six months of 2007. The strengths and weaknesses among the leading indicators have been roughly balanced in recent months.
  • The coincident index remained unchanged in December as small gains in industrial production and employed persons compensated for small declines in retail trade and manufacturing sales. Between June and December, the coincident index increased by 0.4 percent (about a 0.7 percent annual rate), down from a 0.7 percent increase during the first half of 2007 (about a 1.5 percent annual rate). In addition, the strengths among the coincident indicators have been more widespread than the weaknesses in recent months.
  • The leading index has been volatile throughout the last two years, fluctuating around a slightly rising trend, though the index has declined or stayed the same in four of the last six months. Since March, the coincident index has grown at a consistent but sluggish pace, and has declined slightly during the fourth quarter. Likewise, real GDP growth slowed during the fourth quarter to a 1.1 percent annual rate, down from a 1.9 percent average annual rate during the second and third quarters. The behavior of the leading and coincident indexes so far still suggests slow to moderate economic growth should continue in the near term.

LEADING INDICATORS. Four of the seven components in the leading index increased in December. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — are new orders in investment goods industries, stock prices, inventory change series*, and gross enterprises and properties income*. Negative contributors-in order from largest to smallest- are new residential construction orders*, yield spread and consumer confidence.

After remaining unchanged in December, the leading index now stands at 99.2 (1990=100). Based on revised data, this index declined 0.3 percent in November and increased 0.5 percent in October. During the six-month span through December, the leading index decreased 0.8 percent, with three of the eight components increasing (diffusion index, six-month span equals 42.9 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in December. The positive contributors to the coincident index were industrial production, and employed persons. Retail trade, and manufacturing sales declined in December.

After remaining unchanged in December, the coincident index now stands at 109.6 (1990=100). Based on revised data, this index decreased 0.1 percent in November and remained unchanged in October. During the six-month period through December, the coincident index increased 0.4 percent, with three of the four components increasing (diffusion index, six-month span equals 75.0 percent).

DATA AVAILABILITY The data series used to compute the two composite indexes reported in this release are those available "as of" 10:00 A.M. ET February 16, 2008. Some series are estimated as noted below.

NOTES: Series in the leading index for Germany that are based on The Conference Board estimates are inventory change, new residential construction orders, and gross enterprises and properties income. There are no series in the coincident index for Germany that are based on The Conference Board estimates.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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