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.

New York, February 9, 2024…The Conference Board Leading Economic Index^® (LEI) for Germany increased slightly by 0.2 percent in December 2023 to 89.6 (2016=100), after five consecutive months of decline. The LEI contracted by 3.4 percent in the second half of 2023, after increasing by 0.2 percent in the first half of the same year.      

 The Conference Board Coincident Economic Index^® (CEI) for Germany declined by 0.3 percent in December 2023 to 103.6 (2016=100), after a 0.2 percent decrease in November. As a result, the CEI fell by 0.8 percent in the second half of 2023, more than reversing an increase of 0.6 percent in the first half of that year.

“The LEI for Germany rose slightly in December, pausing a five-month slide,” said Allen Li, Associate Economist at The Conference Board. “In December, the rise in the Germany LEI was led by higher stock prices, an improvement in consumer confidence, and stronger new orders for investment goods. The December uptick in the LEI, following a weak second half of 2023, is constructive towards a mild rebound in 2024.  Still, the Conference Board currently expects real GDP growth in Germany to rise by only 0.2 percent in 2024, after contracting by 0.3 percent in 2023.”

The LEI for Germany rose slightly in December, after five months of decline

Stock prices, consumer confidence and orders drove the December recovery in the Germany LEI 

Recession signals remained in December

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 -4.6 percent. The red dotted line is drawn at the threshold value (measured by the median, -4.6 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 Germany: 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 5 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 Germany include: New Orders, Yield 10-Year Minus 3-Month Time Deposits Rate, Consumer Confidence Index, Inventory Change, New Residential Construction Orders, Stock Price Index, and Gross Enterprises and Properties Income.

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