The Conference Board CEI for the Euro Area, a measure of current economic activity, decreased for a fourth time in five months, according to preliminary estimates. Between July 2009 and January 2010, the coincident economic index declined by 0.7 percent (about a -1.4 percent annual rate), slower than the 1.2 percent decline (about a -2.3 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 0.4 percent annual rate during the fourth quarter of 2009, after increasing at a 1.7 percent annual rate during the third quarter.
The Conference Board LEI for the Euro Area has continued to grow in recent months, but its rate of increase has slowed. Meanwhile, The Conference Board CEI for the Euro Area remains on a downtrend, though the pace of its decline is slower than during the first half of 2009. Taken together, the recent behavior of the composite economic indexes suggests that economic conditions should improve in the near term.
LEADING INDICATORS
Six of the eight components in The Conference Board LEI for the Euro Area increased in January. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, the Economic Sentiment Index, real money supply, the Markit business expectations index (services), the Markit Purchasing Managers' Index (manufacturing) and the Dow Jones EURO STOXX® Index. Negative contributors - in order from largest to smallest - are new orders of capital goods and residential building permits.
With the 0.8 percent increase in January, The Conference Board LEI for the Euro Area now stands at 107.4 (2004=100). Based on revised data, this index increased 0.9 percent in December and increased 0.5 percent in November. During the six-month span through January, the index increased 5.5 percent, with five of the eight components increasing (diffusion index, six-month span equals 68.8 percent).
COINCIDENT INDICATORS
Three of the four components that make up The Conference Board CEI for the Euro Area increased in January. The positive contributors were manufacturing turnover, retail trade and industrial production. Employment declined in January.
With the 0.1 percent decrease in January, The Conference Board CEI for the Euro Area now stands at 101.0 (2004=100). Based on revised data, this index decreased 0.3 percent in December and remained unchanged in November. During the six-month period through January, the index decreased 0.7 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).
