The Conference Board CEI for Germany, a measure of current economic activity, declined in August after remaining unchanged in July and June. A positive contribution from industrial production was more than offset by negative contributions from employment and retail trade. Between February and August 2009, the coincident economic index declined by 0.3 percent (about a -0.6 percent annual rate), far slower than the 3.6 percent decline (about a -7.1 percent annual rate) between August 2008 and February 2009. However, the weaknesses among the coincident indicators have remained widespread. 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 five months. As a result, its six-month growth rate has reached its highest rate since 2003. The Conference Board CEI for Germany has remained 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 continue to improve in the months ahead.
LEADING INDICATORS
Five of the seven components in The Conference Board LEI for Germany increased in August. The positive contributors - in order from the largest positive contributor to the smallest - are stock prices, new orders in investment goods industries, yield spread, consumer confidence and inventory change series. Negative contributors - in order from largest to smallest - are new residential construction orders and gross enterprises and properties income.
With the 1.3 percent increase in August, The Conference Board LEI for Germany now stands at 90.1 (2004=100). Based on revised data, this index increased 0.9 percent in July and increased 1.1 percent in June. During the six-month span through August, the index increased 4.3 percent, with five of the seven components increasing (diffusion index, six-month span equals 71.4 percent).
COINCIDENT INDICATORS
One of the four components that make up The Conference Board CEI for Germany increased in August. The only positive contributor was industrial production. Retail trade, employed persons and manufacturing sales declined in August.
With the 0.2 percent decrease in August, The Conference Board CEI for Germany now stands at 101.6 (2004=100). Based on revised data, this index remained unchanged in both July and June. During the six-month period through August, the index decreased 0.3 percent, with one of the four components increasing (diffusion index, six-month span equals 25.0 percent).
