Global Leading Indicators

For Release 9:00 AM ET, August 26, 2024

Using the Composite Indexes: The Leading Economic Index (LEI) provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index (CEI) provides an indication of the current state of the economy. Additional details are below.

The Conference Board Leading Economic Index^®(LEI) for China remained flat in July 2024 at 150.0 (2016=100), following a decline of 0.3 percent in June. The LEI declined by 1.4 percent over the six-month period from January to July 2024, after declining by 1.6 percent over July 2023 to January 2024.

The Conference Board Coincident Economic Index^® (CEI) for China improved by 0.4 percent in July 2024 to 148.6 (2016=100), following an increase of 1.0 percent in June. The Index also grew by 1.2 percent over the six-month period from January to July 2024, less than half the 2.9 percent growth rate over the previous six-month period.

“The China LEI was flat in July,” said Ian Hu, Economic Research Associate, at The Conference Board. “Persistently depressed consumer expectations, alongside a soft Logistics Prosperity Index, low floor space started, and a weak manufacturing PMI, continued to weigh on the Leading Index which has been trending down for over two years. The six- and twelve-month changes to the LEI remained negative and pointed to continuing headwind to growth, though the Index has recently moved out of the recession signal territory. However, the CCP’s July Politburo meeting’s push to accelerate existing initiatives for public stimulus, in conjunction with monetary easing, is expected to support economic activity through 2024. Therefore, The Conference Board forecasts annual real GDP growth at 5.0 percent in 2024.”

The next release is scheduled for Wednesday, September 25, 2024, at 9:00 A.M. ET

The China LEI was unchanged at a 45-month low in July

Consumer expectations remained the main drag on the LEI for China

The six-month growth rate of the China LEI broke free of recession signal territory but still suggested headwinds ahead

NOTE: The chart illustrates the so-called 3Ds—duration, depth, and diffusion—for interpreting a downward movement in the LEI. Duration refers to how long the decline has lasted. Depth denotes the size of decline. Duration and depth are measured by the rate of change of the index over the most recent six months. Diffusion is a measure of how widespread the decline is among the LEI’s component indicators—on a scale of 0 to 100, a six-month diffusion index reading below 50 indicates most components are weakening.

The 3Ds rule signals an impending recession when: 1) the six-month diffusion index lies below 50, shown by the black warning signal lines in the chart; and 2) the LEI’s six-month rate of decline falls below the threshold of −3.1 percent. The red recession signal lines indicate months when both criteria are met simultaneously—and thus that a recession is likely imminent or underway.

About The Conference Board Leading Economic Index® (LEI) and Coincident Economic Index® (CEI) for China
The composite economic indexes are key elements in an analytic system designed to signal peaks and troughs in the business cycle. Comprised of multiple independent indicators, 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 reflects current economic conditions and is highly correlated with real GDP. The LEI is a predictive tool that anticipates—or “leads”—turning points in the business cycle by around five months.

The eight components of the Leading Economic Index® for China are:

• Consumer Expectation Index
• PMI: Mfg: New Export Order
• 5000 Industrial Enterprises Survey: Profitability
• Logistics Prosperity Index
• Loan: Medium & Long Term
• Floor Space Started
• City Labor Market: Demand
• Imports: Machinery and Transport Equipment

The four components of the Coincident Economic Index® for China are:

• Value-Added Industrial Production
• Retail Sales of Consumer Goods
• Electricity Production
• Railway: Freight Traffic

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