The Conference Board CEI for Germany, a measure of current economic activity, remained unchanged in July after decreasing slightly in June. Positive contributions from retail trade and manufacturing sales were offset by negative contributions from industrial production and employment. Between January and July 2009, the coincident economic index declined by 0.8 percent (about a -1.6 percent annual rate), slower than the 2.8 percent decline (about a -5.6 percent annual rate) between July 2008 and January 2009. However, the weaknesses among the coincident indicators have remained very widespread, with all four components decreasing during the past six months. Meanwhile, real GDP rose at a 1.3 percent annual rate during the second quarter of 2009, its first increase since the first quarter of 2008, after falling at a 13.4 percent annual rate during the first quarter of this year.
After a long downtrend between July 2007 and March 2009, The Conference Board LEI for Germany has risen during the past four months. As a result, its six-month growth rate has become positive for the first time since October 2007. The Conference Board CEI for Germany has been essentially flat since March 2009 after falling rapidly between August 2008 and February 2009. Taken together, the recent behavior of the composite economic indexes suggests that the downturn in economic activity could be bottoming out and that economic conditions will likely improve in the months ahead.
LEADING INDICATORS
Six of the seven components in The Conference Board LEI for Germany increased in July. The positive contributors - in order from the largest positive contributor to the smallest - are new orders in investment goods industries, yield spread, consumer confidence, new residential construction orders, inventory change series and stock prices. Gross enterprises and properties income was the only negative contributor this month.
With the 1.1 percent increase in July, The Conference Board LEI for Germany now stands at 89.1 (2004=100). Based on revised data, this index increased 1.1 percent in June and increased 0.6 percent in May. During the six-month span through July, the index increased 0.7 percent, with five of the seven components increasing (diffusion index, six-month span equals 71.4 percent). See notes under data availability
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for Germany increased in July. The positive contributors were retail trade and manufacturing sales. Industrial production and employed persons declined in July.
After remaining unchanged in July, The Conference Board CEI for Germany now stands at 101.7 (2004=100). Based on revised data, this index decreased 0.1 percent in June and increased 0.3 percent in May. During the six-month period through July, the index decreased 0.8 percent, with none of the four components increasing (diffusion index, six-month span equals 0.0 percent).
