The Conference Board CEI for France, a measure of current economic activity, also declined in March, as a result of negative contributions from employment and the industrial production component. In addition, the weaknesses among the coincident indicators have remained widespread in recent months. The six-month change in the coincident economic index stands at -1.5 percent (a -3.0 percent annual rate), down from -0.6 percent (a -1.1 percent annual rate) between March and September 2008. Meanwhile, real GDP fell at a 5.2 percent average annual rate in the fourth quarter of 2008 and first quarter of 2009 (contracting at a 4.7 percent annual rate during the first quarter of 2009), its lowest two-quarter growth rate since 1978.
The Conference Board LEI for France has been on a downtrend for a year and a half now, with the six-month decline in the index at its deepest since the 1974-75 downturn. As a result of persistent and widespread weakness among its components, the index has fallen 9.7 percent from its most recent peak in October 2007. Meanwhile, The Conference Board CEI for France has decreased 2.3 percent from its most recent peak in February 2008. The recent behavior of the composite economic indexes suggests that the contraction in economic activity is likely to continue in the near term.
LEADING INDICATORS
Two of the seven components of the leading economic index increased in March. The positive contributors to the index - in order from the largest positive contributor to the smallest - are the yield spread and production expectations. The negative contributors to the index - beginning with the largest negative contributor - are inverted new unemployment claims, the stock price index, industrial new orders, and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing Building permits (residential) remained unchanged in March.
With the decrease of 0.5 percent in March, the leading economic index now stands at 99.1 (2004=100). Based on revised data, the index declined 0.7 percent in February and declined 0.1 percent in January. During the six-month span through March, the leading economic index decreased 5.5 percent, and one of the seven components increased (diffusion index, six-month span equals 14.3 percent).
COINCIDENT INDICATORS
Two of the four components of the coincident economic index increased in March. The positive contributors to the index were personal consumption, and wage and salaries. Employment, and industrial production declined in March.
With the decrease of 0.2 percent in March, the coincident economic index now stands at 104.0 (2004=100). Based on revised data, this index decreased 0.3 percent in February and decreased 0.3 percent in January. During the six-month period through March, the coincident economic index decreased 1.5 percent, with one of the four series making a positive contribution (diffusion index, six-month span equals 25.0 percent).
