The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged for a third consecutive month in March, according to preliminary estimates. Between September 2009 and March 2010, the coincident economic index increased by 0.2 percent (about a 0.4 percent annual rate), a reversal from the 0.4 percent decline (about a -0.8 percent annual rate) during the previous six months. Additionally, the strengths among the coincident indicators have grown somewhat more widespread than the weaknesses in recent months. At the same time, real GDP grew at a 0.2 percent annual rate (revised) during the fourth quarter of 2009, following an increase of 1.6 percent annual rate in the previous quarter.
The Conference Board LEI for the Euro Area has continued to grow and the index is now just 2.5 percent below its high reached in June 2007. However, its six-month rate of increase has slowed from the rapid pace in the second half of 2009. Meanwhile, The Conference Board CEI for the Euro Area has increased slightly since September 2009. Taken together, the recent behavior of the composite indexes suggests that the moderate improvement in economic activity should continue in the near term.
LEADING INDICATORS
Five of the eight components in The Conference Board LEI for the Euro Area increased in March. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, the Markit Purchasing Managers' Index (manufacturing), EURO STOXX® Index, the Economic Sentiment Index and the Markit business expectations index (services). Negative contributors - in order from largest to smallest - are real money supply, residential building permits and new orders of capital goods.
With the 1.0 percent increase in March, The Conference Board LEI for the Euro Area now stands at 109.2 (2004=100). Based on revised data, this index increased 0.5 percent in February and increased 0.9 percent in January. During the six-month span through March, the index increased 4.3 percent, with five of the eight components increasing (diffusion index, six-month span equals 62.5 percent).
COINCIDENT INDICATORS
One of the four components that make up The Conference Board CEI for the Euro Area increased in March. Retail trade was the only positive contributor in March. Employment and manufacturing turnover declined in March, while industrial production remained unchanged.
After remaining unchanged in March, The Conference Board CEI for the Euro Area now stands at 101.8 (2004=100). Based on revised data, this index remained unchanged in both February and January. During the six-month period through March, the index increased 0.2 percent, with two of the four components increasing (diffusion index, six-month span equals 62.5 percent).
