The Conference Board CEI for Germany, a measure of current economic activity, decreased in August as retail trade, manufacturing sales, and industrial production all made negative contributions. Between February and August 2011, the coincident economic index increased by 0.6 percent (about a 1.1 percent annual rate), slower than the growth of 1.3 percent (about a 2.7 percent annual rate) that prevailed during the previous six months. In addition, the strengths among the coincident indicators have become less widespread in recent months. Meanwhile, real GDP increased at a 0.5 percent annual rate in the second quarter of 2011, after growth of 5.5 percent (annual rate) in the first quarter.
The Conference Board LEI for Germany decreased for a third consecutive month in August, amid widespread weaknesses among its components. As a result, the six-month growth rate of the leading index became negative for the first time since 2009. Meanwhile, The Conference Board CEI for Germany fell in August for the first time in 2011. Taken together, the recent behavior of the composite indexes suggests that the continuation of the expansion in economic activity in the near term is uncertain, and the risks of a downturn are increasing.
LEADING INDICATORS
Two 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 - were the yield spread, and inventory change. Negative contributors - in order from largest to smallest - were stock prices, consumer confidence, new orders in investment goods industries, new residential construction orders and gross enterprises and properties income.
With the 2.0 percent increase in August, The Conference Board LEI for Germany now stands at 107.0 (2004=100). Based on revised data, this index declined 0.1 percent in July and declined 0.2 percent in June. During the six-month span through August, the index decreased 1.2 percent, with two of the seven components increasing (diffusion index, six-month span equals 35.7 percent).
COINCIDENT INDICATORS
Three of the four components that make up The Conference Board CEI for Germany increased in August. The positive contributor was employed persons. Retail trade, manufacturing sales and industrial production declined in August.
With the 0.4 percent decrease in August, The Conference Board CEI for Germany now stands at 106.4 (2004=100). Based on revised data, this index increased 0.4 percent in July and increased 0.2 percent in June. During the six-month period through August, the index increased 0.6 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).
