The Conference Board announced today that the leading index for Spain increased 0.8 percent and the coincident index increased 0.3 percent in July.

The leading index increased sharply again in July. With July's large gain, the leading index grew 2.4 percent from January to July (a 4.8 percent annual rate). In recent months, the growth of the leading index has been fluctuating at about a 4.0 — 5.0 percent annual rate, up from its 2.0 percent growth at the end of 2005. The Spanish contribution to Euro M2 was the largest positive contributor to the leading index over the last six months, but the recent strengths among the leading indicators have continued to be more widespread than weaknesses.

The coincident index also increased in July. Although moderating slightly from the beginning of the year in recent months, the growth of this index of current economic activity continues at about a 3.0 — 4.0 percent annual rate, slightly above its growth in 2005. At the same time, real GDP grew at a 3.8 percent annual rate in the second quarter following the same rate in the first quarter, slightly above the 3.6 percent average rate in the second half of 2005. The recent behavior of the leading index suggests that moderate to strong economic growth should continue in the near term.

LEADING INDICATORS. Five of the six components that make up the leading index increased in May. The positive contributors — in order from the largest positive contributor to the smallest — are the Spanish contribution to Euro M2, the capital equipment component of industrial production, the Spanish equity price index, job placings, and order books survey. The negative contributor was the inverted long-term government bond yield.

With the increase of 0.8 percent in July, the leading index now stands at 146.7 (1990=100). Based on revised data, this index increased 0.6 percent in June and increased 0.6 percent in May. During the six-month span through July, the index increased 2.4 percent, and four of the six components advanced (diffusion index, six-month span equals 66.7 percent).

COINCIDENT INDICATORS. Three of the four components that make up the coincident index increased in July. The positive contributors — in order from the largest positive contributor to the smallest — are final household consumption*, industrial production excluding construction, and real imports*. The retail sales survey declined in July. The next release is scheduled for October 23, 2006 at 9:00 A.M. (ET) In Spain — October 23, 2006 at 3:00 P.M. (CET)

With the increase of 0.3 percent in July, the coincident index now stands at 155.5 (1990=100). Based on revised data, this index increased 0.3 percent in June and increased 0.5 percent in May. During the six-month span through July, the index increased 1.7 percent, and all four components advanced (diffusion index, six-month span equals 100.0 percent).