Global Leading Indicators

The Conference Board Leading Economic Index^®(LEI) for France rose by 0.6 percent in July 2022 to 115.9 (2016=100), following a 0.6 percent increase in June. The LEI grew by 3.0 percent in the six-month period between January and July 2022, much faster than its growth of 0.5 percent from July 2021 to January 2022.

The Conference Board Coincident Economic Index^® (CEI) for France remained unchanged in July 2022 at 107.5 (2016=100), after a 0.2 percent increase in June. The CEI grew by 0.5 percent in the six-month period between January and July 2022, more muted than its growth of 1.3 percent over the previous six-months.

“The LEI for France increased in July driven by the yield spread component and remains on an upward trajectory suggesting moderate economic growth in the short term,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “However, the yield spread component of the LEI has been making outsized positive contributions recently because 10-year bond yields have remained much higher than the day-to-day loan rate in the last six months. However, persistently high inflation, rising interest rates in the Euro Area, energy supply concerns, and slowing Euro Area growth pose considerable downside risks to the economic outlook for France. In fact, the six-month growth rate of the LEI has started to decelerate, with widespread weaknesses among the components. The Conference Board has downgraded its forecast of year-over-year real GDP growth to 2.5 percent for 2022 from 2.6 percent, and 0.4 percent in 2023, from 0.6 percent.”

LEI suggests economic growth may continue in the near term, but headwinds likely to curb growth in 2023 

The yield spread remains positive and was the largest contributor to the LEI’s gain

The growth rate of the LEI has picked up, but slowing growth in euro zone poses challenges to growth

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 11 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/