The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged in February after increasingly slightly in January, according to preliminary estimates. This index was revised upwards between September 2009 and January 2010 after new data for employment became available and data for industrial production was revised. Between August 2009 and February 2010, the coincident economic index increased by 0.1 percent (about a 0.2 percent annual rate), a reversal from the 0.5 percent decline (about a -1.0 percent annual rate) during the previous six months. Additionally, the strengths and weaknesses among the coincident indicators have remained balanced in recent months. At the same time, real GDP grew at a 0.5 percent annual rate during the fourth quarter of 2009.
The Conference Board LEI for the Euro Area has continued to grow and the index is now slightly above its level from February 2008, when the recession began. However, its rate of increase has slowed in recent months. Meanwhile, The Conference Board CEI for the Euro Area has increased slightly since September 2009 and its six-month growth rate has been positive for the last two months. Taken together, the recent behavior of the composite indexes suggests that the improvement in economic activity should continue in the near term.
LEADING INDICATORS
Four of the eight components in The Conference Board LEI for the Euro Area increased in February. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, the Markit Purchasing Managers' Index (manufacturing), new orders of capital goods and real money supply. Negative contributors - in order from largest to smallest - are the Dow Jones EURO STOXX® Index, the Markit business expectations index (services), residential building permits and the Economic Sentiment Index.
With the 0.7 percent increase in February, The Conference Board LEI for the Euro Area now stands at 108.2 (2004=100). Based on revised data, this index increased 0.8 percent in January and increased 0.9 percent in December. During the six-month span through February, the index increased 4.2 percent, with five of the eight components increasing (diffusion index, six-month span equals 68.8 percent).
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for the Euro Area increased in February. The positive contributors were retail trade and industrial production. Employment and manufacturing turnover declined in February.
After remaining unchanged in February, The Conference Board CEI for the Euro Area now stands at 101.8 (2004=100). Based on revised data, this index increased 0.1 percent in January and remained unchanged in December. During the six-month period through February, the index increased 0.1 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).
