Global Business Cycle Indicators

Korea

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Released: Thursday, August 13, 2015

The Conference Board Leading Economic Index® (LEI) for Korea declined 0.2 percent and The Conference Board Coincident Economic Index® (CEI) for Korea remained unchanged in June.

  • The Conference Board LEI for Korea declined in June for the second consecutive month, as large negative contributions from private construction orders and the stock price index more than offset the positive contributions from the value of machinery orders and the index of inventories to shipments. The leading economic index increased by 1.2 percent (about a 2.4 percent annual rate) between December 2014 and June 2015, moderately higher than its increase of 0.9 percent (about a 1.9 percent annual rate) during the previous six months. The weaknesses among the leading indicators are slightly more widespread than the strengths.
  • The Conference Board CEI for Korea, a measure of current economic activity, was unchanged in June. In the six months ending in June 2015, the coincident economic index contracted by 0.2 percent (about a −0.4 percent annual rate), after increasing 1.2 percent (about a 2.5 percent annual rate) over the previous six months. At the same time, real GDP expanded at a 1.2 percent annual rate in the second quarter of 2015, down from 3.3 percent (annual rate) in the first quarter.
  • The LEI for Korea decreased in June. Its six-month growth rate remains higher compared to six months ago, however it has been moderating in recent months. Meanwhile, the CEI for Korea remained unchanged, but its six-month growth rate has turned slightly negative. Taken together, the behavior of both indexes suggests that Korea’s economic expansion should continue, but the pace may be unlikely to accelerate in the near term.

LEADING INDICATORS. Three of the six components that make up The Conference Board LEI for Korea increased in June. The positive contributors – from the largest positive contributor to the smallest – were value of machinery orders, the (inverted) index of inventories to shipments, and the (inverted) yield of government public bonds. Negative contributors – from the largest negative contributor to the smallest – were private construction orders, stock prices, and real exports FOB.

With the 0.2 percent decrease in June, The Conference Board LEI for Korea now stands at 109.5 (2010=100). Based on revised data, this index declined 1.2 percent in May and increased 0.6 percent in April. Over the six-month span through June, the leading economic index increased 1.2 percent, with four of the six components advancing (diffusion index, six-month span equals 66.7 percent).

COINCIDENT INDICATORS. Three of the four components that make up The Conference Board CEI for Korea increased in June. The positive contributors – in order from the largest positive contributor to the smallest – were industrial production, monthly cash earnings*, and total employment. The wholesale and retail sales component declined in June.

Remaining unchanged in June, The Conference Board CEI for Korea now stands at 107.4 (2010=100). Based on revised data, this index decreased 0.4 percent in May and decreased 0.1 percent in April. During the six-month span through June, the coincident economic index decreased 0.2 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).

DATA AVAILABILITY. The data series used to compute The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for Korea reported in this release are those available “as of” 10 A.M. (ET) on August 10, 2015.

* The series in the coincident economic index based on The Conference Board’s estimates is monthly cash earnings. There is no forecasted series in the leading economic index.

The next release is scheduled for Tuesday, September 15 at 10:00 A.M. (KST); Monday, September 14 at 9:00 P.M (ET).

Professional Contacts at The Conference Board:

Indicator Program: indicators@conference-board.org

Media Contacts:

Carol Courter:
1 212 339 0232
carol.courter@conference-board.org

Jonathan Liu:
1 212 339 0257
Jonathan.liu@conference-board.org

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