Global Leading Indicators

This month’s release of the composite economic indexes incorporates annual benchmark revisions which bring them up-to-date with revisions in the source data. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision.

For more information, please visit https://www.conference-board.org/topics/business-cycle-indicators/ or contact us at indicators@conference-board.org.

The Conference Board Leading Economic Index^® (LEI) for the United Kingdom declined slightly by 0.1 percent in November 2023 to 76.2 (2016=100), following a 0.5 percent decrease in October. The LEI for the UK contracted by 3.7 percent in the six-month period ending in November 2023, after a 4.1 percent decline over the previous six-month period from November 2022 to May 2023.

The Conference Board Coincident Economic Index^® (CEI) for the United Kingdom increased by 0.2 percent in November 2023 to 104.6 (2016=100), after being unchanged in October. The CEI for the UK rose by 0.4 percent in the six-month period from May to November 2023, a continuation of the 0.6 percent increase over the previous six-month period.

“The UK LEI ticked down in November,” said Allen Li, Associate Economist at The Conference Board. “Most components of the index were less negative or flat in November compared to a month ago. Despite continuing to slide, the pace of decrease in the UK LEI slowed over the past few months.  The Conference Board currently expects real GDP in the United Kingdom expanded by a tepid 0.3 percent year-over-year in 2023 but may pick up slightly to 0.4 percent in 2024.”

The UK LEI ticked down in November

Most components of the UK LEI were less negative or flat in November compared to a month ago

The growth rate of the UK LEI remains below its long-term trend, suggesting challenges to economic growth 

Note: The chart illustrates the so-called 3D’s rule which is a reliable rule of thumb to interpret the duration, depth, and diffusion – the 3D’s – of a downward movement in the LEI. Duration refers to how long-lasting a decline in the index is, and depth denotes how large the decline is. Duration and depth are measured by the rate of change of the index over the last six months. Diffusion is a measure of how widespread the decline is (i.e., the diffusion index of the LEI ranges from 0 to 100 and numbers below 50 indicate most of the components are weakening). The 3D’s rule provides signals of impending recessions 1) when the diffusion index falls below the threshold of 50 (denoted by the black dotted line in the chart), and simultaneously 2) when the decline in the index over the most recent six months falls below the threshold of -3.5 percent. The red dotted line is drawn at the threshold value (measured by the median, -3.5 percent) on the months when both criteria are met simultaneously. Thus, the red dots signal a recession.

The composite business cycle indexes pre- and post- benchmark revisions: 1970-present

About The Conference Board Leading Economic Index^® (LEI) for The United Kingdom

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by 11 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.

The eight components of The Conference Board Leading Economic Index^® for The United Kingdom include: Unemployment Claimant Counts, Weekly Working Hours, General Economic Situation, Stock Prices, Yield Spread, Productivity, Total Gross Operating Surplus of Corporations, Housing Sales Expectation.

To access data, please visit: https://data-central.conference-board.org/

About The Conference Board

The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead^®. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org