The Conference Board CEI for the U.K., a measure of current economic activity, increased in December for the third time in the past four months. Between June and December 2009, the coincident economic index increased by 0.5 percent (about a 1.0 percent annual rate), after falling by 1.0 percent (about a -1.9 percent annual rate) during the previous six months. Additionally, the strengths among the coincident indicators have remained widespread in recent months. At the same time, real GDP grew at a 0.4 percent annual rate during the fourth quarter of 2009, its first increase since the first quarter of 2008.
After declining from mid-2007 through the first quarter of 2009, The Conference Board LEI for the U.K. has risen sharply during the last three quarters, though the pace of this increase slowed in December. As a result, its six-month growth rate has fallen slightly since October, when it reached its highest rate since 1978. Meanwhile, The Conference Board CEI for the U.K. has been mostly rising since June 2009, and the strengths among its components have become increasingly widespread. Taken together, the recent behavior of the composite indexes suggests that economic conditions will continue to improve in the months ahead.
LEADING INDICATORS
Six of the seven components that make up The Conference Board LEI for the U.K. increased in December. The positive contributors – from the largest positive contributor to the smallest – were the yield spread, order book volume, productivity for the whole economy, stock prices, total gross operating surplus of corporations and consumer confidence. Volume of expected output was the only negative contributor in December.
With the 0.4 percent increase in December, The Conference Board LEI for the U.K. now stands at 99.0 (2004=100). Based on revised data, this index increased 0.9 percent in November and increased 1.1 percent in October. During the six-month span through December, the leading economic index increased 5.4 percent, with all seven components advancing (diffusion index, six-month span equals 100.0 percent).
COINCIDENT INDICATORS
All four components that make up The Conference Board CEI for the U.K. increased in December. The positive contributors – from the largest positive contributor to the smallest – were real household disposable income, industrial production, employment and retail sales.
With the increase of 0.1 percent in December, The Conference Board CEI for the U.K. now stands at 102.8 (2004=100). Based on revised data, this index remained unchanged in November and increased 0.1 percent in October. During the six-month period through December, the coincident economic index increased 0.5 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 percent).
