BRUSSELS, Jan. 30, 2015 /PRNewswire/ -- The
Conference Board Leading Economic Index® (LEI) for
the Euro Area increased 0.2 percent to 103.3 (2010=100) in
December, following a 0.2 percent increase in November, and 0.1
percent decrease in October.
"The Euro Area Leading Economic Index continues to signal slow
growth in the short-term outlook. The anticipation of quantitative
easing and lower oil prices have resulted in more optimism
reflected in improved stock prices, consumer confidence and new
orders for manufacturing goods," says Bert
Colijn, Senior Economist at The Conference Board. "However,
the uncertainties surrounding the relationship of Greece with the rest of the Euro Area, the
expected impact of quantitative easing, and the intensification of
conflict in Ukraine continue to be
sources of volatility for the outlook of growth in Europe."
The Conference Board Coincident Economic
Index® (CEI) for the Euro Area, which measures
current economic activity, was unchanged in December, according to
preliminary estimates. The index now stands at 99.9* (2010 = 100).
The CEI increased 0.1 percent in November and increased 0.2 percent
in October.
About The Conference Board Leading Economic Index®
(LEI) for the Euro Area
The Conference Board Leading Economic Index®
for the Euro Area was launched in January
2009. Plotted back to 1987, this index has successfully
signaled turning points in the business cycle of the bloc of
countries that now constitute the Euro Area, defined by the common
currency zone.
The Conference Board currently produces leading economic indexes
for twelve other individual countries, including Australia, Brazil, China, France, Germany, India, Japan,
Korea, Mexico, Spain, the U.K. and the U.S.
The eight components of The Conference Board Leading Economic
Index® for the Euro Area include:
Interest Rate Spread (source: European Central Bank)
Consumer expectation of general economic condition of next 12
months (source: European Commission)
Index of Residential Building Permits Granted (source:
Eurostat)
EURO STOXX® Index (source: STOXX Limited)
Systemic Stress Composite Indicator (source: European Central
Bank)
Capital Goods New Orders, index (source: European Central Bank)
Eurozone Manufacturing New Orders Index (source: Markit
Economics)
Eurozone Service Sector Future Business Activity Expectations Index
(source: Markit Economics)
To view The Conference Board calendar for 2015 indicator
releases:
http://www.conference-board.org/data/
* Series in The Conference Board LEI for the Euro Area that are
based on The Conference Board estimates are real money supply and
residential building permits. All series in The Conference Board
CEI for the Euro Area are based on The Conference Board estimates
(employment, industrial production, retail trade, and manufacturing
turnover).
Summary Table of
Composite Indexes
|
|
|
|
2014
|
|
|
|
6-month
|
|
Oct
|
|
Nov
|
|
Dec
|
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Jun to
Dec
|
|
|
|
|
|
|
|
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|
Leading Economic
Index (LEI)
|
102.9
|
p
|
103.1
|
p
|
103.3
|
p
|
|
|
Percent
Change
|
-0.1
|
p
|
0.2
|
p
|
0.2
|
p
|
1.4
|
p
|
Diffusion
|
62.5
|
|
56.3
|
|
62.5
|
|
62.5
|
|
|
|
|
|
|
|
|
|
|
Coincident
Economic Index (CEI)
|
99.8
|
p
|
99.9
|
p
|
99.9
|
p
|
|
|
Percent
Change
|
0.2
|
p
|
0.1
|
p
|
0.0
|
p
|
0.4
|
p
|
Diffusion
|
100.0
|
|
87.5
|
|
75.0
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
n.a. Not
available p
Preliminary r Revised
|
|
|
|
|
|
Indexes equal 100 in
2010
|
|
|
|
|
|
|
|
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Source: The
Conference
Board
All Rights Reserved
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About The Conference Board
The Conference Board is a global, independent business
membership and research association working in the public
interest. Our mission is unique: To provide the world's leading
organizations with the practical knowledge they need to
improve their performance and better serve society. The Conference
Board is a non-advocacy, not-for-profit entity holding 501 (c) (3)
tax-exempt status in the United States.
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January 2015 Annual Benchmark
Revisions
The January 30, 2015 release of
The Conference Board Leading Economic Index® (LEI)
for the Euro Area incorporates annual benchmark revisions to the
composite indexes. Also, effective with the January 2015 release, the history of the
composite indexes has been updated to reflect the inclusion of
Lithuania into the Euro Area,
and the base year of the composite indexes was changed to 2010 =
100 from 2004 = 100. These regular benchmark revisions bring the
indexes up-to-date with revisions in the source data. The 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 incorporated when the benchmark revision is made and the
entire histories of the indexes are recomputed. As a result, the
revised indexes and their month-over-month changes will no longer
be directly comparable to those issued prior to the benchmark
revision. The entire history of the indexes from 1987 to present
has been revised.
January 2015 Comprehensive
Benchmark Revisions
In addition to these regular annual revisions, The
Conference Board implemented a comprehensive revision of The
Conference Board Leading Economic Index® (LEI) for the Euro
Area, effective with the January 30,
2015 release.
These comprehensive revisions are the result of an extensive
reevaluation of existing components of The Conference Board
Leading Economic Index® for the Euro Area. The Conference
Board has decided to add one component, replace three components
and make a minor adjustment to another component. The composition
changes reflected in the new LEI address structural changes that
have occurred in the Euro Area economy in the last three decades.
The changes in the LEI composition include:
- incorporating the capital goods new orders index, from the
European Central Bank experimental statistics based on national
data;
- incorporating the Systemic Stress Composite Indicator from the
European Central Bank starting in 1999, and omitting real money
supply (M2) starting in 1987;
- replacing the Markit Purchasing Managers' Index (Manufacturing)
with the Markit Manufacturing New Orders Index;
- replacing the Economic Sentiment Indicator with Consumer
Expectations of General Economic Situation over Next 12
months, from the European Commission.
In addition to these major changes to the composition, The
Conference Board has implemented changes in the methodology and
procedures used in the calculation process. These modifications
are:
- normalized levels of the indicator rather than its monthly
changes will be used to calculate the component contributions of
components based on diffusion indexes such as the Markit
Manufacturing New Orders Index, and the Markit Business
Expectations Index (Services);
- when component data are missing, autoregressions in log
differences instead of levels will be used to calculate the
statistical imputation of the missing months;
- trend adjustment will be done in two periods: 1987-1999 and
2000-2013; and
- Systemic Stress Composite Indicator contributions to the LEI
are calculated from its normalized levels (not monthly changes) and
it is inverted.
As a result of these changes, the history of the revised indexes
and their month-over-month changes will no longer be directly
comparable to those issued prior to the comprehensive benchmark
revision.
The composition changes in the new LEI address partly structural
changes that have occurred in the Euro Area economy in the last
three decades as well as advances in the available statistics for
the Euro Area economy. The Conference Board research shows that the
new LEI is a more consistent measure of the Euro Area business
cycle and shows better performance in predicting cyclical
downturns.
For more information, please visit our website at
http://www.conference-board.org/data/bci.cfm or contact
indicators@conference-board.org.
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SOURCE The Conference Board