The Conference Board CEI for the Euro Area, a measure of current economic activity, declined slightly for a third consecutive month in November according to preliminary estimates. Between May and November 2009, the coincident economic index decreased by 0.6 percent (about a -1.2 percent annual rate), slower than the 2.3 percent decline (about a -4.5 percent annual rate) during the previous six months. Additionally, the strengths and weaknesses among the coincident indicators have remained balanced in recent months. At the same time, real GDP grew at a 1.5 percent annual rate during the third quarter, its first increase since the first quarter of 2008.
The Conference Board LEI for the Euro Area has rebounded sharply since March, but its rate of growth has slowed recently. Meanwhile, The Conference Board CEI for the Euro Area continued to decline, albeit at a slower pace than earlier in 2009. Taken together, the recent behavior of the composite economic indexes suggests that the downturn in economic activity is bottoming out and that economic conditions will continue to improve in the near term.
LEADING INDICATORS
Five of the eight components in The Conference Board LEI for the Euro Area increased in November. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, the Economic Sentiment Index, real money supply, the Markit Purchasing Managers' Index (manufacturing) and new orders of capital goods. The negative contributors - in order from largest to smallest - are the Markit business expectations index (services), the Dow Jones EURO STOXX® Index and residential building permits.
With the 0.7 percent increase in November, The Conference Board LEI for the Euro Area now stands at 101.7 (2004=100). Based on revised data, this index increased 0.6 percent in October and increased 0.9 percent in September. During the six-month span through November, the index increased 7.3 percent, with six of the eight components increasing (diffusion index, six-month span equals 75.0 percent).
COINCIDENT INDICATORS
Three of the four components that make up The Conference Board CEI for the Euro Area increased in November. The positive contributors were manufacturing turnover, retail trade and industrial production. Employment declined in November.
With the 0.1 percent decrease in November, The Conference Board CEI for the Euro Area now stands at 101.4 (2004=100). Based on revised data, this index decreased 0.2 percent in October and decreased 0.2 percent in September. During the six-month period through November, the index decreased 0.6 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).
