The Conference Board announced that the leading index for the U.K increased 0.6 percent, and the coincident index increased 0.1 percent in April.



The leading index increased sharply in April, the fourth consecutive increase. The largest contributor to this gain was again order book volume, followed by stock prices and volume of expected output. The growth of the leading index continued to accelerate; the index rose about 2.2 percent from October to April (a 4.5 percent annual rate), picking up from a six-month growth rate of about 2.5 percent (annual rate) at the end of 2006, but this is still below the 5.3 percent annual rate in mid-2006. In addition, the strengths among the leading indicators have been somewhat more widespread than the weaknesses in recent months.

The coincident index increased slightly in April, continuing on a slow growth trend since mid-2006, and this index of current economic activity has seen little or no growth since October 2006. However, in April, the strengths were more widespread than the weaknesses among the coincident indicators. At the same time, real GDP grew at almost a 3.0 percent annual rate in the first quarter, down from about a 3.4 percent rate in the first quarter of 2006. The recent improvement in the leading index suggests moderate economic growth is likely to continue, and perhaps pick up slightly, in the near term.

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

With the 0.6 percent increase in April, the leading index now stands at 141.7 (1990=100). Based on revised data, this index increased 0.4 percent in March and increased 0.8 percent in February. During the six-month span through April, the leading index increased 2.2 percent, with five of the eight components advancing (diffusion index, six-month span equals 62.5 percent).

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

With the increase of 0.1 percent in April, the coincident index now stands at 117.1 (1990=100). Based on revised data, this index increased 0.1 percent in March and increased 0.1 percent in February. During the six-month period through April, the coincident index increased 0.1 percent, with three of the four components advancing (diffusion index, six-month span equals 87.5 percent).