The Conference Board announced today that the leading index for the U.K increased 0.3 percent, and the coincident index remained unchanged in January.



The leading index increased again in January with order book volume making the largest positive contribution to the gain. The leading index grew 1.4 percent from July to January (a 2.7 percent annual rate), about the same rate as in early 2006 but below the 5.0 to 5.5 percent annual rate growth reached in mid-2006. In addition, the strengths among the leading indicators have continued to be somewhat more widespread than the weaknesses in recent months.

The coincident index remained the same in January. The six month growth rate of the coincident index is about 0.7 percent annual rate, only slightly below the 1.0 percent annual rate reached in the first half of 2006. The strengths among the coincident indicators have been very widespread in recent months. At the same time, real GDP growth has been fluctuating around a 3.0 percent annual rate in 2006, with a 3.4 percent annual rate in the fourth quarter. The recent behavior of the leading and coincident indexes so far suggests moderate economic growth is likely to continue in the near term.

LEADING INDICATORS. Five of the eight components that make up the leading index increased in January. The positive contributors — from the largest positive contributor to the smallest — were order book volume, volume of expected output, operating surplus of corporations, productivity for the whole economy*, and stock prices. The negative contributors — from the largest contributor to the smallest — were consumer confidence and the fixed interest price index, and new orders for engineering industries*.

With the 0.3 percent increase in January, the leading index now stands at 139.2 (1990=100). Based on revised data, this index increased 0.1 percent in December and increased 0.1 percent in November. During the six-month span through January, the leading index increased 1.4 percent, with six of the eight components advancing (diffusion index, six-month span equals 75.0 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in January. The positive contributors — from the largest positive contributor to the smallest — were employment *, real household disposable income*, industrial production. Retail sales declined in January.

The coincident index now stands at 117.4 (1990=100). Based on revised data, this index increased 0.3 percent in December and remained unchanged in November. During the six-month period through January, the coincident index increased 0.4 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).