Global Business Cycle Indicators


Press Release Archive

Released: Thursday, December 11, 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 Spain decreased by 1.2 percent and the coincident index decreased 0.3 percent in October.

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  • The Leading Index experienced its largest one month decline in October since 1991, as stock prices, the order books survey, the capital equipment component of industrial production and job placings all made large negative contributions. Since April, the leading index has declined by 2.2 percent (about a -4.4 percent annual rate), well below its 0.3 percent decline (about a -0.6 percent annual rate) between October 2007 and April 2008. Additionally, the weaknesses among the leading indicators have remained very widespread in recent months.
  • The coincident index, a measure of current economic activity, declined for the sixth consecutive month in October. The index was also revised substantially downward from June to September to reflect third quarter data which became available this month, showing that both employment and final household consumption had declined significantly. During the past six months, the coincident index has declined at a 4.9 percent annual rate, well below the 0.1 percent annual rate of increase which prevailed during the previous six months. The weaknesses among the coincident indicators have remained very widespread, with all five components declining over the past six months. At the same time, real GDP declined at a 1.0 annual rate during the third quarter, below the 1.0 average annual growth rate for the first half of 2008.
  • The leading index has been on a downtrend since February 2008, declining by 3.0 percent during this span, its largest decrease since 1992. Similarly, the coincident index has been falling after peaking in February, experiencing its greatest decline since the 1992-93 downturn. Taken together, the recent behavior of the composite indexes suggests that economic activity is unlikely to improve soon, and that the economy could contract further in the near term.

LEADING INDICATORS. One of the six components that make up the leading index increased in October. The lone positive contributor this month is the inverted long-term government bond yield. The negative contributors — in order from the largest negative contributor to the smallest — are the Spanish equity price index, order books survey, the capital equipment component of industrial production, job placings, and the Spanish contribution to Euro M2.

With the decrease of 1.2 percent in October, the leading index now stands at 153.8 (1990=100). Based on revised data, this index declined 0.3 percent in September and increased 0.6 percent in August. During the six-month span through October, the index decreased 2.2 percent, and one of the six components advanced (diffusion index, six-month span equals 16.7 percent).

COINCIDENT INDICATORS. One of the five components that make up the coincident index increased in October. The only positive contributor this month was real imports*. Industrial production excluding construction, employment*, final household consumption* and the retail sales survey declined in October.

With the decrease of 0.3 percent in October, the coincident index now stands at 154.6 (1990=100). Based on revised data, this index decreased 0.4 percent in September and decreased 0.5 percent in August. During the six-month span through October, the index decreased 2.5 percent, and none of the five components advanced (diffusion index, six-month span equals 0.0 percent).

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. (ET) December 9, 2008. Some series are estimated as noted below.

NOTES: Series in the coincident index based on The Conference Board estimates include final household consumption, employment and real imports. There are no series in the leading index based on The Conference Board estimates.