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Press Release Archive
Released: Tuesday, September 9, 2014
The Conference Board Leading Economic Index® (LEI) for Japan decreased 0.8 percent and The Conference Board Coincident Economic Index® (CEI) decreased 0.1 percent in July.
- The Conference Board LEI for Japan fell again in July. This month’s decline was driven by negative contributions from new orders for machinery and construction, the six-month growth rate of labor productivity and dwelling units started. The leading economic index declined by 3.5 percent (about a -6.8 percent annual rate) from January to July 2014, a reversal from its growth of 2.1 percent (about a 4.3 percent annual rate) over the previous six months. Additionally, the weaknesses among the leading indicators were slightly more widespread than the strengths in recent months.
- The Conference Board CEI for Japan edged down, with all of its components except industrial production declining in July. The growth rate of the coincident economic index for the six-month period ending in July 2014 fell by 2.1 percent (about a -4.1 percent annual rate), slower than the growth of 0.8 percent (a 1.7 percent annual rate) over the previous six months. Moreover, the weaknesses among the coincident indicators continued to be widespread. At the same time, real GDP registered its largest contraction since 2009, declining at a 7.1 percent annual rate in the second quarter of 2014, following a 6.0 percent increase (annual rate) in the first quarter.
- The recent rate of decline in both the LEI and CEI for Japan accelerated further through July, with weaknesses slightly more widespread than strengths. The sharp contraction in second quarter GDP was mainly due to an increase in the sales tax, the effects of which should be temporary. Taken together, the recent behavior of the LEI and CEI suggests that the rate of economic activity is unlikely to accelerate considerably in the near-term, with downside risks to growth still persisting.
LEADING INDICATORS. Five of the ten components that make up The Conference Board LEI for Japan increased in July. The positive contributors to the index – in order from the largest positive contributor to the smallest – include (inverted) business failures, the Tankan business conditions survey, stock prices, the interest rate spread, and real money supply. The negative contributors – in order from the largest negative contributor to the smallest – include the new orders for machinery and construction component*, the six-month growth rate of labor productivity, dwelling units started, real operating profits*, and the index of overtime worked.
With the decrease of 0.8 percent in July, The Conference Board LEI for Japan now stands at 97.4 (2004=100). Based on revised data, this index decreased 0.8 percent in June and decreased 1.2 percent in May. During the six-month span through July, the index decreased 3.5 percent, and four of the ten components advanced (diffusion index, six-month span equals 45.0 percent).
COINCIDENT INDICATORS. Only one of the four components that make up The Conference Board CEI for Japan increased in July. The positive contributor to the index was industrial production. Number of employed persons, the retail, wholesale, and manufacturing sales* component and wage and salary income declined in July.
With the decrease of 0.1 percent in July, The Conference Board CEI for Japan now stands at 95.0 (2004=100). Based on revised data, this index decreased 0.5 percent in June and increased 0.1 percent in May. During the six-month span through July, the index decreased 2.1 percent, and one of the four components advanced (diffusion index, six-month span equals 25.0 percent).
DATA AVAILABILITY AND NOTES. The data series used to compute The Conference Board Leading Economic Index® (LEI) for Japan and The Conference Board Coincident Economic Index® (CEI) for Japan reported in this release are those available “as of” 3:00 P.M. ET September 8, 2014. Some series are estimated as noted below.
* The series in The Conference Board LEI that are based on our estimates are the six month growth rate of labor productivity, real operating profits and new orders for machinery. The series in The Conference Board CEI that is based on our estimates is real manufacturing sales.
THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.