The Conference Board Coincident Economic Index® (CEI) for the U.K. declined slightly in February, its first decrease in four months. Index levels were revised slightly lower in recent months as a result of newly released fourth-quarter data for real household disposable income. In the six-month period ending February 2011, the coincident economic index decreased 0.1 percent (a -0.2 percent annual rate), a reversal from the growth of 1.0 percent (a 2.0 percent annual rate) between February and August 2010. In addition, the weaknesses among the coincident indicators have been widespread in recent months. Meanwhile, real GDP declined at a 2.0 percent annual rate in the final quarter of 2010, following growth of 2.9 percent annual rate in the third quarter.
The Conference Board LEI for the UK has been on a rising trend since the second quarter of 2009, and its six-month growth rate has picked up slightly in recent months. Meanwhile, The Conference Board CEI for the UK, a measure of current economic activity, has remained essentially flat since the middle of 2010. Taken together, the recent behavior of the composite indexes suggests that economic activity will likely expand in the near-term, albeit at a modest pace.
LEADING INDICATORS
Five of the seven components that make up The Conference Board LEI for the U.K. increased in February. The positive contributors - from the largest positive contributor to the smallest – were volume of expected output, the yield spread, order book volume, productivity for the whole economy, and stock prices. Consumer confidence declined in February, while total gross operating surplus of corporations remained unchanged.
With the 0.6 percent increase in February, The Conference Board LEI for the U.K. now stands at 103.5 (2004=100). Based on revised data, this index increased 0.4 percent in January and increased 0.6 percent in December. During the six-month span through February, the leading economic index increased 2.2 percent, with six of the seven components advancing (diffusion index, six-month span equals 85.7 percent).
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for the U.K. increased in February. The positive contributors – from the larger positive contributor - were employment and real household disposable income. Industrial production and retail sales declined in February.
With the decrease of 0.1 percent in February, The Conference Board CEI for the U.K. now stands at 102.6 (2004=100). Based on revised data, this index increased 0.2 percent in January and remained unchanged in December. During the six-month period through February, the coincident economic index decreased 0.1 percent, with one of the four components advancing (diffusion index, six-month span equals 37.5 percent).
