The Conference Board CEI for Germany, a measure of current economic activity, decreased in September for a second consecutive month as industrial production fell sharply. Between March and September 2011, the coincident economic index increased by 0.4 percent (about a 0.8 percent annual rate), slower than the growth of 1.6 percent (about a 3.3 percent annual rate) between September 2010 and March 2011.
Additionally, the strengths among the coincident indicators have become less widespread in recent months. Meanwhile, real GDP increased at a 2.0 percent annual rate in the third quarter of 2011, after growth of 1.1 percent (annual rate) in the second quarter.
The Conference Board LEI for Germany decreased for a fourth consecutive month in September, amid widespread weaknesses among its components. As a result, the six-month change in the leading index fell to its lowest rate since May 2009.
Meanwhile, The Conference Board CEI for Germany has fallen for the past two months after trending upwards for the past two years. Taken together, the recent behavior of the composite indexes suggests that the risk of an economic contraction in the near term has risen substantially.
LEADING INDICATORS
Two of the seven components in The Conference Board LEI for Germany increased in September. The positive contributors - in order from the larger positive contributor to the smaller - were inventory change and the yield spread. Negative contributors - in order from largest to smallest - were new orders in investment goods industries, stock prices, consumer confidence, new residential construction orders and gross enterprises and properties income.
With the 1.4 percent increase in September, The Conference Board LEI for Germany now stands at 105.1 (2004=100). Based on revised data, this index declined 2.3 percent in August and declined 0.2 percent in July. During the six-month span through September, the index decreased 3.1 percent, with one of the seven components increasing (diffusion index, six-month span equals 14.3 percent).
COINCIDENT INDICATORS
Three of the four components that make up The Conference Board CEI for Germany increased in September. The positive contributors were manufacturing sales, retail trade, and employed persons. Industrial production declined in September.
With the 0.1 percent decrease in September, The Conference Board CEI for Germany now stands at 106.4 (2004=100). Based on revised data, this index decreased 0.2 percent in August and increased 0.4 percent in July. During the six-month period through September, the index increased 0.4 percent, with two of the four components increasing (diffusion index, six-month span equals 62.5 percent).
