The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged in December, according to preliminary estimates. During the second half of 2010, the coincident index increased by 0.2 percent (about a 0.4 percent annual rate), slower than the increase of 0.8 percent (about a 1.6 percent annual rate) during the first half of 2010. Additionally, the strengths and weaknesses among the coincident indicators have only been balanced in recent months. At the same time, real GDP increased at a (revised) 1.4 percent annual rate during the third quarter of 2010, slowing from a (revised) 4.1 percent annual rate of growth during the second quarter.
The Conference Board LEI for the Euro Area remains on a rising trend amid widespread strengths among its components. Its six-month growth rate has picked up lately but is still well below its growth rate during the second half of 2009. Meanwhile, The Conference Board CEI for the Euro Area has also been rising, but at a slower pace in recent months. Taken together, the recent behavior of the composite indexes suggests that economic activity should continue to grow, though at a moderate pace in the near term.
LEADING INDICATORS
Five of the eight components in The Conference Board LEI for the Euro Area increased in December. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, the Markit Purchasing Managers' Index (manufacturing), the Economic Sentiment Index, the Markit business expectations index (services), and the EURO STOXX® Index. Negative contributors - in order from largest to smallest - are real money supply, new orders of capital goods, and residential building permits.
With the 0.8 percent increase in December, The Conference Board LEI for the Euro Area now stands at 107.3 (2004=100). Based on revised data, this index increased 0.6 percent in November and increased 0.2 percent in October. During the six-month span through December, the index increased 3.0 percent, with all eight components increasing (diffusion index, six-month span equals 100.0 percent).
COINCIDENT INDICATORS
One of the four components that make up The Conference Board CEI for the Euro Area increased in December. The only positive contributor to the index was retail trade. Manufacturing turnover and employment declined while industrial production remained unchanged in December.
After remaining unchanged in December, The Conference Board CEI for the Euro Area now stands at 102.6 (2004=100). Based on revised data, this index increased 0.1 percent in November and increased 0.2 percent in October. During the six-month period through December, the index increased 0.2 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).
