The Conference Board CEI for the U.K., a measure of current economic activity, increased for the fourth consecutive month in May. Between November 2009 and May 2010, the coincident economic index increased by 0.2 percent (about a 0.4 percent annual rate), a reversal from the 0.6 percent decline (about a -1.2 percent annual rate) between July 2009 and January 2010. Additionally, the strengths among the coincident indicators have become slightly more widespread than the weaknesses in recent months. At the same time, real GDP grew at a 1.2 percent annual rate during the first quarter of 2010, after growing at a (revised) 1.7 percent annual rate during the fourth quarter of 2009.
The Conference Board LEI for the U.K. has been rising for more than a year now, though its six-month growth rate has continued to moderate. Meanwhile, The Conference Board CEI for the U.K. has increased during the past four months, after having been on a flat to slightly declining path since the middle of 2009. Taken together, the recent behavior of the composite indexes suggests that the improvement in economic conditions should continue in the months ahead.
LEADING INDICATORS
Four of the seven components that make up The Conference Board LEI for the U.K. increased in May. The positive contributors – from the largest positive contributor to the smallest – were order book volume, the yield spread, volume of expected output and productivity for the whole economy. The negative contributors – from the largest negative contributor to the smallest – were stock prices and consumer confidence. Total gross operating surplus of corporations remained unchanged in May.
With the 0.3 percent increase in May, The Conference Board LEI for the U.K. now stands at 102.4 (2004=100). Based on revised data, this index increased 0.6 percent in April and increased 1.0 percent in March. During the six-month span through May, the leading economic index increased 3.6 percent, with five of the seven components advancing (diffusion index, six-month span equals 78.6 percent).
COINCIDENT INDICATORS
All four components that make up The Conference Board CEI for the U.K. increased in May. The positive contributors – from the largest positive contributor to the smallest – were industrial production, employment, retail sales and real household disposable income.
With the increase of 0.1 percent in May, The Conference Board CEI for the U.K. now stands at 102.6 (2004=100). Based on revised data, this index increased 0.1 percent in April and increased 0.2 percent in March. During the six-month period through May, the coincident economic index increased 0.2 percent, with two of the four components advancing (diffusion index, six-month span equals 62.5 percent).
