The Conference Board CEI for Germany, a measure of current economic activity, increased moderately in October, after declining in September. Industrial production made a large positive contribution to the index this month, following a decline in the previous month. During the last six months, the coincident economic index rose by 1.0 percent (a 1.9 percent annual rate), slightly slower than the increase of 1.4 percent (a 2.8 percent annual rate) during the previous six months. However, the strengths among the coincident indicators have been very widespread, with all four components increasing over the past six months. In addition, real GDP grew at a 2.8 percent annual rate in the third quarter of 2010, following an increase of 9.5 percent annual rate in the second quarter.
The Conference Board LEI for Germany has been on a rising trend for one and a half years now, amid widespread strength among its components. However, its six-month growth rate has moderated recently. Meanwhile, The Conference Board CEI for Germany rose this month, after remaining essentially unchanged in the third quarter. Taken together, the recent behavior of the composite indexes suggests that economic activity should continue expanding, though perhaps at a moderate pace in the near term.
LEADING INDICATORS
Five of the seven components in The Conference Board LEI for Germany increased in October. The positive contributors – in order from the largest positive contributor to the smallest ndash; were new residential construction orders, the yield spread, stock prices, consumer confidence, and new orders in investment goods industries. The negative contributors ndash; in order from largest to smallest ndash; were inventory change and gross enterprises and properties income.
With the 0.8 percent increase in October, The Conference Board LEI for Germany now stands at 107.1 (2004=100). Based on revised data, this index increased 0.7 percent in September and increased 0.9 percent in August. During the six-month span through October, the index increased 3.9 percent, with five of the seven components increasing (diffusion index, six-month span equals 71.4 percent).
COINCIDENT INDICATORS
All four components that make up The Conference Board CEI for Germany increased in October. The positive contributors – in order from the largest positive contributor to the smallest – were industrial production, manufacturing sales, employed persons, and retail trade.
With the 0.3 percent increase in October, The Conference Board CEI for Germany now stands at 104.4 (2004=100). Based on revised data, this index decreased 0.2 percent in September and increased 0.2 percent in August. During the six-month period through October, the index increased 1.0 percent, with all four components increasing (diffusion index, six-month span equals 100.0 percent).
