Global Leading Indicators

Due to a programming error, the Leading Economic Index (LEI) for Germany for May was incorrectly reported on July 12, 2022. It has been corrected and the impact on the LEI and its growth was minimal.

The Conference Board Leading Economic Index^®(LEI) for Germany decreased by 0.3 ^c percent in May 2022 to 93.6 ^c (2016=100), after declining by 1.3 ^c percent in April. The LEI declined by 4.1 ^c percent in the six-month period from November 2021 to May 2022, a significantly larger change than the 0.4 decline over the previous six-month.

The Conference Board Coincident Economic Index^® (CEI) for Germany increased by 0.1 ^c percent in May 2022 to 103.5 (2016=100), following a 0.2 ^c percent decline in April. Also, the CEI increased by 0.3 percent in the six-month period from November 2021 to May 2022, about the same rate of change as over the previous six-month period.

“The LEI for Germany points to increasing recession risks amid rising interest rates and uncertainty about energy supplies in the near term,” said Ataman Ozyildirim, Senior Director, Economic Research, at The Conference Board. “Falling new orders for investment goods and stock prices were behind the latest decline. While The Conference Board still projects year-on-year real GDP growth of 1.6 percent in 2022, the rapidly declining LEI suggests the risk of a downturn later in the year has risen. Additionally, The Conference Board has downgraded its 2023 real GDP growth projection to 0.9 percent.”

The LEI points to risks to economic growth as it tilts to the downside

New orders for investment goods and stock prices led the decline in the LEI for Germany

Germany LEI growth at its lowest level since July 2020

 C – corrected

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.

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