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The Conference Board publishes leading, coincident, and lagging indexes designed to signal peaks and troughs in the business cycle for major economies around the world.
LEI for Germany Dipped in May
Latest Press Release
Updated: Monday, July 15, 2024
For Release 9:30 AM ET, July 15, 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 Germany declined slightly by 0.2 percent in May 2024 to 87.8 (2016=100), after improving by 0.3 percent in April (an upward revision based on latest available data). The LEI for Germany contracted by 1.2 percent between November 2023 and May 2024, a slower rate of decline than the 3.9 percent contraction over the previous six-month period.
The Conference Board Coincident Economic Index® (CEI) for Germany decreased by 0.3 percent in May 2024 to 103.9 (2016=100), reversing a 0.3 percent gain in April. Over the six-month period between November 2023 and May 2024, the growth rate for the Germany CEI remained unchanged, an improvement from a 0.6 percent decline over the previous six-month period.
“The LEI for Germany declined slightly in May, partially reversing the previous month’s gain,” said Allen Li, Associate Economist at The Conference Board. “Large negative contributions from the yield spread and new orders for investment goods fueled LEI’s monthly decline. However, the other five components improved, and most of them have had a positive contribution to the Index over the past six months. As a result, the six-month growth of Germany LEI continued to improve, signaling that headwinds to growth have abated. The Conference Board expects German real GDP to grow by a modest 0.3 percent in 2024.”
The next release is scheduled for Wednesday, August 14, 2024, at 9:30 A.M. ET.
The Germany LEI dipped slightly in May
Negative contributions from the yield spread and new orders for investment goods weighed on the LEI this month
The longer-term trajectory of the Germany LEI continued to improve, and did not signal trouble ahead in May
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 diffusion index reading below 50 indicates most components are weakening.
The 3Ds rule signals an impending recession when: 1) the 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 −4.6 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 Germany
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 seven components of Leading Economic Index® for Germany include:
- New Orders for Investment Goods
- Yield Spread, 10-Year Minus 3-Month Time Deposits Rate
- Consumer Confidence Index
- Inventory Change
- New Residential Construction Orders
- Stock Price Index
- Gross Enterprises and Properties Income
The four components of the Coincident Economic Index® for Germany are:
- Industrial Production
- Employed Persons
- Retail Trade
- Manufacturing Sales
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
