Global Leading Indicators

LEI for China Declined for Third Consecutive Month in May

The Conference Board Leading Economic Index^®(LEI) for China decreased by 0.8 percent in May 2022 to 166.8 (2016=100), following a 1.9 percent decline in April. In addition, the LEI contracted by 0.7 percent in the six-month period from November 2021 to May 2022, a reversal from its 3.3 percent growth rate over the previous six-month period.

The Conference Board Coincident Economic Index^® (CEI) for China increased by 2.7 percent in May 2022 to 134.3 (2016=100), after a 5.2 percent decline in April. The CEI contracted by 0.7 percent in the six-month period between November 2021 to May 2022, in contrast to 0.4 percent growth between May and November 2021.

“The China LEI declined for a third consecutive month amid increasing risks to economic growth in the near term,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “While loans to medium and large firms and residential building improved in May, worsening consumer expectations more than offset the improvement among other LEI components. The zero COVID-19 policy as well as slowing global growth are creating significant headwinds to the economic outlook in China.”

Decline in China LEI is reflecting headwinds due to COVID-19 restrictions and slowing global growth

The recent trajectory of the China LEI points to slowing economic growth

About The Conference Board Leading Economic Index^® (LEI) for China: 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 5 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 India include Consumer Expectation Index, PMI: Mfg: New Export Order, 5000 Industrial Enterprises Survey, Logistics Prosperity Index, Loan: Medium & Long Term, Floor Space Started, City Labor Market: Demand, and Imports: Machinery and Transport Equipment.

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