The Conference Board Leading Economic Index® (LEI) for Korea increased 0.1 percent while The Conference Board Coincident Economic Index®(CEI) declined 0.3 percent in February.

The Conference Board LEI for Korea increased slightly in February, following large gains in the previous five months. The strengths and weaknesses among the leading indicators were balanced this month. With February’s small gain, the six-month growth rate in the leading economic index continued to pick up, to 5.9 percent (about a 12.2 percent annual rate) from August 2010 to February 2011, from a decline of 0.3 percent (about a -0.5 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have been widespread over the past six months.

The Conference Board CEI for Korea, a measure of current economic activity, declined in February. Large negative contributions from the wholesale and retail sales component and industrial production more than offset the positive contribution from employment this month. With the decline in February, the six-month growth rate of the coincident economic index stands at 1.3 percent (about a 2.7 percent annual rate) in the period through February 2011, slightly lower than the 1.7 percent increase (about a 3.4 percent annual rate) for the previous six months. At the same time, real GDP grew at a 2.0 percent annual rate in the fourth quarter of 2010, down from 2.6 percent (annual rate) in the previous quarter.

The Conference Board LEI for Korea continued its upward trend through February, after declining slightly in the third quarter of last year. Its six-month growth rate has also picked up recently. Meanwhile, The Conference Board CEI for Korea declined for the first time since September last year, and its six-month growth rate has slightly moderated. Taken together, the current behavior of the composite indexes and their components suggest that economic activity will likely grow at a moderate pace in the near term.

LEADING INDICATORS

Four of the seven components that make up The Conference Board LEI for Korea increased in February. The positive contributors – from the largest positive contributor to the smallest – were value of machinery orders, letter of credit arrivals, private construction orders, and real exports FOB. Negative contributors – from the largest negative contributor to the smallest – were stock prices, the (inverted) index of inventories to shipments, and the (inverted) yield of government public bonds.

With the 0.1 percent increase in February, The Conference Board LEI for Korea now stands at 121.8 (2004=100). Based on revised data, this index increased 1.2 percent in both January and December. During the six-month span through February, the leading economic index increased 5.9 percent, with five of the seven components advancing (diffusion index, six-month span equals 78.6 percent).

COINCIDENT INDICATORS

Only one of the four components that make up The Conference Board CEI for Korea increased in February. The positive contributor was total employment. The wholesale and retail sales component, industrial production, and monthly cash earnings declined in February.

With the 0.3 percent decrease in February, The Conference Board CEI for Korea now stands at 114.9 (2004=100). Based on revised data, this index increased 0.3 percent in January and increased 0.6 percent in December. During the six-month span through February, the coincident economic index increased 1.3 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 percent).