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The Conference Board Leading Economic Index®(LEI) for China in June 2011
added: 2011-09-22

The Conference Board Leading Economic Index®(LEI) for China increased 0.6 percent in July to 158.6 (2004 = 100), following a 0.9 percent increase in June and a 0.4 percent increase in May. Four of the six components contributed positively to the index in July.

The Conference Board LEI for China increased again in July, but there were slight downward revisions to the previous months as actual data for the 5000 industry enterprises diffusion index became available for the second and third quarters. Total loans issued by financial institutions and floor space started made large positive contributors to the index this month. With the gain, the six-month growth rate of the leading economic index continued to pick up – to 3.4 percent (about a 6.9 percent annual rate) from January to July this year, from 1.4 percent (about a 2.8 percent annual rate) in the previous six months. The strengths and weaknesses among the leading indicators have been balanced in recent months.

The Conference Board CEI for China, a measure of current economic activity, also increased in July. All components except volume of passenger traffic advanced this month. With July’s gain, the growth in the coincident economic index rose to 5.1 percent (about a 10.5 percent annual rate) in the six-month period through July, up from 2.1 percent (about a 4.2 percent annual rate) for the previous six months. The strengths among the coincident indicators have remained very widespread in recent months.

The Conference Board LEI for China continued its upward trend through July this year, after a brief pause in the fourth quarter of last year. The growth rate of the LEI picked up sharply in recent months. In the meantime, The Conference Board CEI for China also continued to rise, and its six-month growth rate has picked up as well. Taken together, the recent behavior of the composite indexes and their components so far suggests that economic expansion will continue in the near term.

LEADING INDICATORS

Four of the six components that make up The Conference Board LEI for China increased in July. The positive contributors to the index - in order from the largest positive contributor to the smallest – include total loans issued by financial institutions, total floor space started, PMI new export orders, and the consumer expectations index. The negative contributors to the index - in order from the larger negative contributor to the smaller – were the (inverted) PMI supplier delivery index and the 5000 industry enterprises diffusion index: raw materials supply index declined.

With the increase of 0.6 percent in July, The Conference Board LEI for China now stands at 158.6 (2004=100). Based on revised data, this index increased 0.9 percent in June and increased 0.4 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, six-month 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 manufacturing employment, retail sales of consumer goods, value-added of industrial production, and electricity production. Volume of passenger traffic remained unchanged in July.

With the increase of 0.4 percent in July, The Conference Board CEI for China now stands at 205.5 (2004=100). Based on revised data, this index increased 1.2 percent in June and increased 0.6 percent in May. During the six-month span through July, The Conference Board CEI for China increased 5.1 percent, and all five components advanced (diffusion index, six-month span equals 100.0 percent).


Source: The Conference Board

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