The Conference Board CEI for the Euro Area, a measure of current economic activity, remained unchanged in June, according to preliminary estimates. A positive contribution from retail trade compensated for the decline in manufacturing turnover. During the first half of the year, the coincident economic index increased 0.3 percent (a 0.6 percent annual rate), slightly below the growth of 0.4 percent (a 0.8 percent annual rate) between June and December 2011. However, the strengths among the coincident indicators have been widespread recently. Meanwhile, real GDP increased at a 3.4 percent annual rate in the first quarter of 2011, following growth of 1.1 percent annual rate in the final quarter of 2010.
The Conference Board LEI for the Euro Area continued to decline in June, its third decline in the past four months. As a result, the six-month change in the LEI has dropped to its lowest rate since May 2009. Meanwhile, The Conference Board CEI for the Euro Area remained unchanged in June, following slight gains in the previous two months. Taken together, the recent behavior of the composite indexes suggests that economic activity should continue to grow, albeit more slowly in the near term.
LEADING INDICATORS
Three of the eight components in The Conference Board LEI for the Euro Area increased in June. The positive contributors - in order from the largest positive contributor to the smallest - are the interest rate spread, real money supply, and residential building permits. The negative contributors — in order from largest to smallest - are the Markit Purchasing Managers' Index (manufacturing), the Markit business expectations index (services), the EURO STOXX® Index, the Economic Sentiment Index, and new orders of capital goods.
With the 0.3 percent decrease in June, The Conference Board LEI for the Euro Area now stands at 108.5 (2004=100). Based on revised data, this index declined 0.1 percent in May and increased 0.2 percent in April. During the six-month span through June, the index increased 1.1 percent, with two of the eight components increasing (diffusion index, six-month span equals 31.3 percent).
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for the Euro Area increased in June. The positive contributors were retail trade and employment. Manufacturing turnover declined in June while industrial production remained unchanged.
After remaining unchanged in June, The Conference Board CEI for the Euro Area stands at 103.1 (2004=100). Based on revised data, this index increased 0.1 percent in May and increased 0.2 percent in April. During the six-month period through June, the index increased 0.3 percent, with three of the four components increasing (diffusion index, six-month span equals 75.0 percent).
