The Conference Board announced today that the leading index for Germany increased 0.1 percent and the coincident index increased 0.2 percent in December.



The leading index increased slightly in December, following two consecutive decreases. In December, consumer confidence and stock prices continued to make the largest positive contributions to the index. The leading index grew 0.6 percent from June to December (about a 1.2 percent annual rate), down from a very rapid rate of 5.0 to 6.0 percent (annual rate) in the first quarter of 2006. Still, the strengths among the leading indicators have been somewhat more widespread than weaknesses in recent months.
The coincident index increased in December, following two consecutive increases. In December, retail sales made a very large positive contribution followed by employment, but industrial production made a negative contribution. However, the strengths among the coincident indicators have been very widespread in recent months.
Following a steep rise throughout 2005, the leading index moderated slightly through the end of 2006. At the same time, real GDP grew at a 4.7 percent annual rate in the fourth quarter of 2006, up from the 2.6 percent annual rate in the third quarter and 3.8 percent average annual rate in the first half of 2006. The behavior of the leading and coincident composite indexes suggests that moderate economic growth is likely to continue in the near term.
LEADING INDICATORS. Five of the eight components in the leading index increased in December. The positive contributors to the leading index — in order from the largest positive contributor to the smallest — are consumer confidence, stock prices, inventory change series*, gross enterprises and properties income*, and yield spread. Negative contributors — in order from largest to smallest — are new residential construction orders and new orders in investment goods industries.

With the 0.1 percent increase in December, the leading index now stands at 97.8 (1990=100). Based on revised data, this index declined 0.4 percent in November and declined 0.4 percent in October. During the six-month span through December, the leading index increased 0.6 percent, with five of the eight components increasing (diffusion index, six-month span equals 71.4 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in December. The positive contributors to the coincident index were retail trade, employed persons, and manufacturing sales. Industrial production declined in December.

With the 0.2 percent increase in December, the coincident index now stands at 108.1 (1990=100). Based on revised data, this index increased 0.3 percent in November and increased 0.1 percent in October. During the six-month period through December, the coincident index increased 0.8 percent, with all of the four components increasing (diffusion index, six-month span equals 100.0 percent).