July. With this month’s gain, the leading economic index has increased by 3.4 percent (a 6.8 percent annual rate) in the six-month period through July 2010, about the same rate as the previous six months. However, the strengths among the leading indicators have become less widespread, and have just been balanced with the weaknesses over the past six months.
The Conference Board CEI for China, a measure of current economic activity, also increased in July. Value-added industrial production declined for the first time since January this year, but all the other coincident indicators advanced in July. With this month’s gain, the coincident economic index increased by 6.5 percent (a 13.5 percent annual rate) in the six-month period through July 2010, slightly up from the gain of 5.9 percent (about a 12.2 percent annual rate)
for the previous six months. Moreover, the strengths among the coincident indicators have remained very widespread, with all components advancing in recent months.
The Conference Board LEI for China continued to increase in July. Its six-month growth rate has been fairly steady this year, but it is considerably below the growth rate in the first half of 2009. In addition, the strengths among the leading indicators have also become less widespread. At the same time, The Conference Board CEI for China has been on an upward trend, and the strengths among its components have remained very widespread. All in all, the behavior of the composite indexes and their components suggest that China’s economic activity should continue expanding in the coming months.
LEADING INDICATORS
Four of the six components that make up The Conference Board LEI for China decreased in July. The negative contributors to the index – in order from the largest negative contributor to the smallest – include the (inverted) PMI supplier delivery index, total floor space started, the 5000 industry enterprises diffusion index: raw materials supply index, and the consumer expectations index. Total loans issued by financial institutions and the PMI new export orders index increased in July.
With the increase of 0.5 percent in July, The Conference Board LEI for China now stands at 147.6 (2004=100). With data revisions, this index increased 0.7 percent in June and increased 0.9 percent in May. During the six-month span through July, The Conference Board LEI for China increased 3.4 percent, and three of the six components advanced (diffusion index, sixmonth span equals 50.0 percent).
COINCIDENT INDICATORS
Four of the five components that make up The Conference Board CEI for China increased in July. The positive contributors to the index – in order from the largest positive contributor to the smallest – include electricity production, retail sales of consumer goods, manufacturing employment, and volume of passenger traffic. Value-added industrial production declined in July.
With the increase of 0.5 percent in July, The Conference Board CEI for China now stands at 187.3 (2004=100). This index increased 1.0 percent in June and increased 0.9 percent in May. During the six-month span through July, The Conference Board CEI for China increased 6.5 percent, and all five components advanced (diffusion index, six-month span equals 100.0 percent).
