The Conference Board CEI for Germany, a measure of current economic activity, also continued to fall in March as a result of declines in manufacturing sales, employment and retail trade. Between September 2008 and March 2009, the coincident economic index decreased by 3.9 percent (about a -7.6 percent annual rate), after remaining unchanged during the previous six months. Additionally, the weaknesses among the coincident indicators have become very widespread, with all four components decreasing during the past six months. At the same time, real GDP declined at an average annual rate of 11.5 percent during the fourth quarter of 2008 and first quarter of 2009 (including a 14.4 percent annual rate of contraction during the first quarter), its largest two-quarter contraction since 1960.
The Conference Board LEI for Germany has been generally falling since July 2007 and the rapid pace of this decline has remained stable in recent months, with the six-month change in the index remaining near the lowest level in its 44-year history. Correspondingly, The Conference Board CEI for Germany has been declining since September 2008, and is currently experiencing its steepest contraction ever. Taken together, the persistent and rapid declines in the composite economic indexes suggest that the downturn is unlikely to end soon and that the contraction in economic activity may remain deep in the near term.
LEADING INDICATORS
Two of the seven components in The Conference Board LEI for Germany increased in March. The positive contributors - in order from the largest positive contributor to the smallest - are the yield spread and inventory change series. Negative contributors - in order from largest to smallest - are stock prices, new orders in investment goods industries, new residential construction orders, consumer confidence and gross enterprises and properties income.
With the 1.1 percent decrease in March, The Conference Board LEI for Germany now stands at 86.6 (2004=100). Based on revised data, this index declined 2.0 percent in February and declined 2.4 percent in January. During the six-month span through March, the index decreased 12.6 percent, with two of the seven components increasing (diffusion index, six-month span equals 28.6 percent).
COINCIDENT INDICATORS
None of the four components that make up The Conference Board CEI for Germany increased in March. Manufacturing sales, employed persons, and retail trade declined in March while industrial production remained unchanged.
With the 0.4 percent decrease in March, The Conference Board CEI for Germany now stands at 101.4 (2004=100). Based on revised data, this index decreased 0.6 percent in February and decreased 1.3 percent in January. During the six-month period through March, the index decreased 3.9 percent, with none of the four components increasing (diffusion index, six-month span equals 0.0 percent).
