The Conference Board announced that the leading index for the U.K increased 0.8 percent, and the coincident index increased 0.2 percent in February.



The leading index increased again in February, the ninth consecutive increase, and the order book volume and volume of expected output components continued to make the largest positive contributions. With this month's increase, the leading index grew 1.8 percent from August to February (a 3.7 percent annual rate), but this is still below the 5.0 to 5.5 percent growth (annual rate) reached in mid-2006. In addition, the strengths among the leading indicators have continued to be more widespread than weaknesses in recent months.

The coincident index increased slightly in February. Although the strengths among the coincident indicators have been very widespread in recent months, the coincident index has been on an essentially flat trend since the first half of 2006. Following its rapid growth in the first half of 2006, the growth of the leading index moderated towards the end of the year, but it picked up slightly again in recent months. At the same time, real GDP growth has been fluctuating around a 3.0 percent annual rate in 2006, with a 2.6 percent annual rate in the fourth quarter. The recent behavior of the leading and coincident indexes so far still 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 February. The positive contributors — from the largest positive contributor to the smallest — were volume of expected output, order book volume, stock prices, productivity for the whole economy, and operating surplus of corporations. The negative contributors — from the largest contributor to the smallest — were the fixed interest price index, consumer confidence, and new orders for engineering industries.

With the 0.8 percent increase in February, the leading index now stands at 140.5 (1990=100). Based on revised data, this index increased 0.3 percent in January and increased 0.1 percent in December. During the six-month span through February, the leading index increased 1.8 percent, with six of the eight components advancing (diffusion index, six-month span equals 68.8 percent).

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

With the increase of 0.2 percent in February, the coincident index now stands at 117.1 (1990=100). Based on revised data, this index decreased 0.1 percent in January and remained unchanged in December. During the six-month period through February, the coincident index increased 0.2 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).