Global Leading Indicators

For Release 9:00 AM ET, October 28, 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 decreased by 0.2% in September 2024 to 149.4 (2016=100), after a similar 0.2% decrease in August. The LEI declined by 1.2% over the six-month period from March to September of 2024, slightly less than the 1.5% contraction over the six-month period between September 2023 and March 2024.

The Conference Board Coincident Economic Index^® (CEI) for China improved by 0.6% in September 2024 to 150.6 (2016=100), following an increase of 0.7% in August. Overall, the Index grew by 2.9% over the six-month period from March to September of 2024, nearly double the 1.5% growth rate over the previous six-month period.

“The China LEI decreased slightly in September, continuing the gradual downward trend that began in early 2022,” said Ian Hu, Economic Research Associate, at The Conference Board. “A persistently depressed consumer confidence weighed heavily on the Index. The Logistics Prosperity Index, low machinery and transport equipment imports, and a weak manufacturing PMI also fueled the decline. The semi- and annual growth rates of the Index remain negative but less so than in recent months, suggesting obstacles to economic growth persist but have not intensified. According to the National Bureau of Statistics in China, real GDP growth slowed further to 4.6% year-over-year in Q3 2024 from 4.7% in Q2. Therefore, taking also into account the on-going public stimulus, The Conference Board currently projects an annual real GDP growth of 4.8% in 2024 and 4.5% in 2025.”

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

The China LEI declined again in September

Low consumer confidence persists to weigh on the Index

The 6-month growth rate of the China LEI have remained just above of the recession signal

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 −3.0%. 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