Global Business Cycle Indicators
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|Benchmark Revisions - January 2008|
Press Release Archive
Released: Wednesday, October 22, 2003
The Conference Board announced today that the leading index for Australia increased 0.3 percent and the coincident index increased 0.5 percent in August.
- The leading index increased by 0.3 percent in August, but this just offsets a 0.4 percent decline in July and keeps the leading index on an essentially flat path since early this year. The coincident index increased by 0.5 percent in August, but this large one-month increase may be the result of monthly volatility.
- As reported last month, the leading index excluding the money supply had been flat in recent months after falling significantly in early 2003. This hasn’t changed. But an improvement in the availability of the money supply data caused a downward revision to the money supply’s contribution over the last five months, resulting in a downward revision in the leading index. As a result, the overall leading index as well as the leading index excluding money has been flat since early this year.
- The Australian economy decelerated slowly through the middle of 2003, with real GDP growth slowing to a 1.4 percent annual rate in the first half of the year. This is consistent with the decline in the leading index in late 2002 and early 2003. The flatness in the leading index since early this year suggests somewhat less sluggishness in the second half of the year.
Leading Indicators.Four of the eight components in the leading index increased in August. The positive contributors to the index — in order from the largest positive contributor to the smallest — are money supply*, share prices, yield spread, and gross operating surplus*. Three of the eight components of the leading index decreased in August. The negative contributors to the index — in order from the largest negative contributor to the smallest — are (inverted) "medium-term" government bond yield, building approvals*, and rural goods exports*. The sales to inventories ratio* was unchanged.
With the 0.3 percent increase in August, the leading index now stands at 148.0 (1990=100). Based on revised data, this index decreased 0.4 percent in July and remained unchanged in June. During the six-month span through August, the leading index increased 0.1 percent, and four of the eight components increased (diffusion index, six-month span equals 50.0 percent).
Coincident Indicators.All five components in the coincident index increased in August. The increases - in order from the largest positive contributor to the smallest – occurred in employed persons, the (inverted) unemployment rate, retail trade*, household gross disposable income*, and industrial production*.
With the 0.5 percent increase in August, the coincident index now stands at 114.5 (1990=100). Based on revised data, this index declined 0.2 percent in July and remained flat in June. During the six-month period through August, the coincident index increased 0.4 percent, with three components in the series making positive contributions (diffusion index, six-month span equals 60.0 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" 5 P.M. ET on October 21, 2003. Some series are estimated as noted below.
NOTES: Series in the leading index that are based on The Conference Board estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals, and the CPI used to deflate money supply M3. Series in the coincident index that are based on The Conference Board estimates are industrial production and household disposable income. CPI was used to deflate retail trade.
Due to the Reserve Bank of Australia’s discontinuation of the 3-month Treasury Bill (for details see "For the Record" in the June 2002 RBA bulletin), The Conference Board will use the Bank Accepted Bill 90 Days to calculate the yield spread from now on.
THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.