The Conference Board CEI for France, a measure of current economic activity, declined for the sixth consecutive month in February, as a result of negative contributions from employment, personal consumption, and industrial production. In addition, the weaknesses among the coincident indicators have remained widespread in recent months. The six-month change in the coincident economic index has fallen to -1.2 percent (a -2.4 percent annual rate), down from -0.6 percent (a -1.1 percent annual rate) between February and August 2008. Meanwhile, real GDP declined at a 1.9 percent average annual rate in the last half of 2008 (declining at a 4.4 percent annual rate in the fourth quarter of 2008), its lowest average annual rate over two quarters since 1993.
The decline in The Conference Board LEI for France has been the deepest since the 1974-75 downturn. As a result of persistent and widespread weakness among its components, the index has fallen 9.5 percent from its most recent peak in October 2007. Meanwhile, The Conference Board CEI for France has decreased 1.8 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 through the first half of 2009 and that economic conditions could deteriorate further in the near term.
LEADING INDICATORS
Two of the seven components of The Conference Board LEI for France increased in February. 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 industrial new orders, inverted new unemployment claims, the stock price index, building permits (residential), and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing.
With the decrease of 0.7 percent in February, The Conference Board LEI for France now stands at 99.4 (2004=100). Based on revised data, the index declined 0.1 percent in January and declined 1.0 percent in December. During the six-month span through February, the leading economic index decreased 6.0 percent, and one of the seven components increased (diffusion index, six-month span equals 14.3 percent).
COINCIDENT INDICATORS
One of the four components of The Conference Board CEI for France increased in February. The positive contributor to the index was the wage and salaries component. Employment, personal consumption, and industrial production declined in February.
With the decrease of 0.2 percent in February, The Conference Board CEI for France now stands at 104.5 (2004=100). Based on revised data, this index decreased 0.2 percent in January and decreased 0.2 percent in December. During the six-month period through February, the coincident economic index decreased 1.2 percent, with one of the four series making a positive contribution (diffusion index, six-month span equals 25.0 percent).
