Global Leading Indicators

The Conference Board Leading Economic Index^®(LEI) for the Euro Area fell by 1.0 percent in October 2022 to 110.8 (2016=100), following a decrease of 1.1 percent in September. The LEI declined by 4.0 percent in the six-month period from April to October 2022, more than offsetting the 1.8 percent increase over the previous six-month period.

The Conference Board Coincident Economic Index^® (CEI) for the Euro Area remained unchanged in October 2022 at 106.9 (2016=100), following a 0.2 percent increase in September. The CEI grew by 0.8 percent in the six-month period from April to October 2022, down slightly from an increase of 1.0 percent from October 2021 to April 2022.

“The Euro Area LEI fell sharply again in October, marking its eighth consecutive monthly decline,” said Casey Cloutier, Economic Research Analyst at The Conference Board. “The yield spread and the volume of order books in manufacturing contributed positively to the index while all others declined. Persistently high inflation, tightening monetary policy, and the energy crisis all continue to weigh on economic prospects for the Euro Area. The Conference Board projects that the Euro Area is likely to experience a recession in the final quarter of 2022 and first quarter of 2023. Year-over-year GDP growth in the Euro Area could slow to 0.3 percent in 2023.” 

The Euro Area LEI declined for the eighth consecutive month in October

ECB Yield Spread and Volume of Order Books contributions to the LEI were not enough to offset the negative contributions from all other components

The recent LEI trajectory for the Euro Area suggests that a recession is increasingly likely in the coming months

About The Conference Board Leading Economic Index^® (LEI) for Euro Area: 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 1 month. 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 Euro Area include: ECB Yield Spread, Consumer Expectation of General Economy, Manufacturing New Orders, Volume of Order Books, Business Expectations Survey, Eurostoxx Index, Systemic Stress Composite Indicator, Building Permits.

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