The Conference Board CEI for the U.K., a measure of current economic activity, increased in September for the third time in the last four months. Between March and September 2009, the coincident economic index increased by 0.1 percent (about a 0.2 percent annual rate), after falling by 1.3 percent (about a -2.5 percent annual rate) during the previous six months. Additionally, the strengths and weaknesses among the coincident indicators have remained balanced in recent months. Meanwhile, real GDP contracted at a 1.6 percent annual rate during the third quarter of 2009, following a decline of 2.3 percent annual rate during the second quarter.
After falling steadily between the middle of 2007 and the first quarter of 2009, The Conference Board LEI for the U.K. has risen sharply during the past two quarters. Its six-month growth rate has continued to pick up, reaching the highest rate since 1993. Meanwhile, The Conference Board CEI for the U.K. has increased modestly since May, with its six-month change becoming positive for the first time in a year. Taken together, the recent behavior of the composite indexes suggests that the downturn in economic activity is bottoming out and that economic conditions will continue to improve in the months ahead.
LEADING INDICATORS
Six of the seven components that make up The Conference Board LEI for the U.K. increased in September. The positive contributors – from the largest positive contributor to the smallest – were consumer confidence, the yield spread, volume of expected output, stock prices, order book volume and productivity for the whole economy. Operating surplus of corporations was the only negative contributor in September.
With the 1.0 percent increase in September, The Conference Board LEI for the U.K. now stands at 94.9 (2004=100). Based on revised data, this index increased 0.9 percent in August and increased 0.5 percent in July. During the six-month span through September, the leading economic index increased 5.3 percent, with six of the seven components advancing (diffusion index, six-month span equals 85.7 percent).
COINCIDENT INDICATORS
Three of the four components that make up The Conference Board CEI for the U.K. increased in September. The positive contributors – from the largest positive contributor to the smallest – were industrial production, employment and real household disposable income. Retail sales remained unchanged in September.
With the increase of 0.2 percent in September, The Conference Board CEI for the U.K. now stands at 102.8 (2004=100). Based on revised data, this index remained unchanged in August and increased 0.2 percent in July. During the six-month period through September, the coincident economic index increased 0.1 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).
