The Conference Board CEI for the U.K., a measure of current economic activity, was unchanged in March, following two consecutive declines. The index was revised downwards in January and February as new data for employment became available. During the past six months, the coincident economic index decreased 0.4 percent (about a -0.8 percent annual rate), down from the 0.1 percent increase (about a 0.2 percent annual rate) for the previous six months. Additionally, the strengths and weaknesses among the coincident indicators have been balanced in recent months. Meanwhile, real GDP fell at a 6.7 percent average annual rate during the fourth quarter of 2008 and first quarter of 2009 (contracting at a 7.4 percent annual rate during the first quarter), the lowest two-quarter growth rate since 1955.
The Conference Board LEI for the U.K. has been on a downtrend since its peak in June 2007, amid widespread weakness among its components. The duration, depth and diffusion of the decline in the leading economic index have not been this severe since the recession in the beginning of the 1980s. The Conference Board CEI for the U.K. has declined slightly since the beginning of the year, after remaining basically flat during the second half of 2008. Taken together, the behavior of the composite economic indexes suggests that economic activity will continue to contract in the near term.
LEADING INDICATORS
Three of the seven components that make up The Conference Board LEI for the U.K. increased in March. The positive contributors – from the largest positive contributor to the smallest – were yield spread, operating surplus of corporations and consumer confidence. The negative contributors – from the largest negative contributor to the smallest – were order book volume, stock prices, volume of expected output, and productivity for the whole economy.
With the 0.5 percent decrease in March, The Conference Board LEI for the U.K. now stands at 91.6 (2004=100). Based on revised data, this index declined 0.6 percent in February and declined 0.5 percent in January. During the six-month span through March, the leading economic index decreased 5.6 percent, with two of the seven components advancing (diffusion index, six-month span equals 28.6 percent).
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for the U.K. increased in March. The positive contributors – from the largest positive contributor to the smallest – were real household disposable income and retail sales. Industrial production and employment declined in March.
After remaining unchanged in March, The Conference Board CEI for the U.K. now stands at 103.6 (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 0.4 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).
