Global Leading Indicators

About the Leading Economic Index and the Coincident Economic Index:

The Leading Economic Index 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 provides an indication of the current state of the economy. Additional details are below.

The Conference Board Leading Economic Index^® (LEI) for France fell by 0.3 percent in February 2024 to 112.1 (2016=100), after also declining by 0.3 percent in January. As a result, the LEI contracted by 1.8 percent between August 2023 and February 2024, and more than reversed the 0.6 percent increase over the previous six-month period.

The Conference Board Coincident Economic Index^® (CEI) for France increased by 0.1 percent to 111.0 (2016=100) in February 2024, offsetting the 0.1 percent decline in January. The CEI grew by 0.2 percent between August 2023 and February 2024, a continuation of the 0.2 percent gain over the previous six-month period.

“The France LEI fell again in February, and on a six-month basis, the rate of decline has steepened since the downtrend in LEI started in the summer of last year,” said Allen Li, Associate Economist at The Conference Board. “February’s decline in the LEI was driven by negative contributions from the yield spread, building permits, and unemployment claims. Moreover, the declining six-month growth trajectory of the France LEI, coupled with more widespread weakness among the components triggered the recession signal in February. The Conference Board currently expects real GDP growth for France to remain weak in the first half of 2024 and rebound in the second half of year as the ECB starts cutting interest rates. Still, annual real GDP growth would only reach 0.7 percent in 2024 after 0.9 percent in 2023.”

The France LEI continued to slip in February 

February’s decline in the LEI was driven by negative contributions from the yield spread, building permits, and unemployment claims

The declining six-month growth trajectory of the France LEI, coupled with more widespread weakness among the components, triggered the recession signal in February

Note: The chart illustrates the so-called 3D’s rule which is a reliable rule of thumb to interpret the duration, depth, and diffusion – the 3D’s – of a downward movement in the LEI. Duration refers to how long-lasting a decline in the index is, and depth denotes how large the decline is. Duration and depth are measured by the rate of change of the index over the last six months. Diffusion is a measure of how widespread the decline is (i.e., the diffusion index of the LEI ranges from 0 to 100 and numbers below 50 indicate most of the components are weakening). The 3D’s rule provides signals of impending recessions 1) when the diffusion index falls below the threshold of 50 (denoted by the black dotted line in the chart), and simultaneously 2) when the decline in the index over the most recent six months falls below the threshold of -2.1 percent. The red dotted line is drawn at the threshold value (measured by the median, -2.1 percent) on the months when both criteria are met simultaneously. Thus, the red dots signal a recession.

About The Conference Board Leading Economic Index® (LEI) for France

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 12 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 seven components of The Conference Board Leading Economic Index® for France include: Yield Spread - 10 year minus short-term rate#, Stock Price, Building Permits, New Unemployment Claims, Industrial New Orders, Industry Survey: Production Expectations, and Ratio Price/Labor Cost.

#The short-term rates used are Day-to-Day Loan rate, Euribor, and Ester through the history of this variable.

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