The Conference Board CEI for Korea, a measure of current economic activity, increased slightly again in July. A large gain in the wholesale and retail sales component more than offset negative contributions from industrial production and total employment. Despite the small gain, the six-month growth rate of the coincident economic index has also slowed, increasing by 0.7 percent (about a 1.4 percent annual rate) between January and July this year, down from the 1.1 percent rate (about a 2.3 percent annual rate) from July 2010 to January 2011. At the same time, real GDP grew at a 3.6 percent annual rate in the second quarter of 2011, down from the 5.4 percent annual rate in the first quarter of the year.
The Conference Board LEI for Korea has been on an essentially flat trend this year, and its six-month growth rate has slowed from the beginning of this year. Meanwhile, The Conference Board CEI for Korea continued to increase through July, but its growth rate has also moderated in recent months. The current behavior of the composite indexes and their components suggest that economic expansion should continue in the coming months, albeit at a more moderate pace.
Two of the seven components that make up The Conference Board LEI for Korea increased in July. The positive contributors – from the larger positive contributor to the smaller – were real exports FOB and stock prices. The negative contributors – from the largest negative contributor to the smallest – were the (inverted) index of inventories to shipments, value of machinery orders, letter of credit arrivals, private construction orders, and the (inverted) yield of government public bonds.
With the 0.2 percent decrease in July, The Conference Board LEI for Korea now stands at 121.8 (2004=100). Based on revised data, this index declined 0.5 percent in June and increased 0.5 percent in May. During the six-month span through July, the leading economic index increased 0.1 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent).
Two of the four components that make up The Conference Board CEI for Korea increased in July. The positive contributors – in order from the larger positive contributor to the smaller – were the wholesale and retail sales component and monthly cash earnings. Industrial production and total employment declined in July.
With the 0.1 percent increase in July, The Conference Board CEI for Korea now stands at 115.7 (2004=100). Based on revised data, this index increased 0.2 percent in June and increased 0.3 percent in May. During the six-month span through July, the coincident economic index increased 0.7 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent).