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For Release 9:30 AM ET, February 17, 2025
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 ticked up by 0.1% in December 2024 to 87.3 (2016=100), after declining by 0.2% in November (was upwardly revised from a 0.5% initial estimated decline). Over the second half of 2024, the LEI for Germany contracted by 0.2%, a significant improvement from the 2.2% contraction over the first half of the same year.
The Conference Board Coincident Economic Index® (CEI) for Germany declined by 0.4% in December 2024 to 103.2 (2016=100), after a 0.1% rise in November. As a result, CEI for Germany fell by 0.5% during the latter half of 2024, a negative turn from the 0.1% rise over the first half of the past year.
“The LEI for Germany showed a slight improvement in December 2024,” said Allen Li, Associate Economist at The Conference Board. “The gain was driven by positive contributions from stock prices, consumer confidence, and new residential construction orders while the yield spread continued to weigh on the index and new orders for investment goods weakened for the second consecutive month. The Index seems to have stabilized in the second half of 2024 after over a year of decline. As a result, the semi and annual growths of the Germany LEI, while still negative, have recovered from the early 2024 lows, suggesting lessened headwinds to economic growth ahead. All considered, after a contraction of 0.2% in 2024, The Conference Board currently projects a sluggish recovery in German with real GDP reaching only 0.4% for 2025, as political and trade uncertainties persist in the near term.”
The next release is scheduled for Friday, March 14, 2025, at 9:30 A.M. ET.
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.
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 are:
The four components of the Coincident Economic Index® for Germany are:
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
With graph and summary table
February 17, 2025
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