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 Spain declined by 0.7 percent in August 2023 to 94.6 (2016=100), following a 0.4 percent decrease in July. The LEI contracted by 1.3 percent in the six-month period from February to August 2023, after decreasing by 2.0 percent over the previous six-month period between August 2022 and February 2023.   

The Conference Board Coincident Economic Index^® (CEI) for Spain increased moderately by 0.1 percent in August 2023 to 109.5 (2016=100), after rising by 0.2 percent in July. The CEI grew by 1.2 percent in the six-month period between February and August 2023, following no change over the previous six-month period.

“The LEI for Spain declined in August for the third month in a row, suggesting that the strong post-COVID recovery has peaked,” said Allen Li, Associate Economist at The Conference Board. “On a six-month basis, components of the Spain LEI showed weakness, except for job placements and stock prices. The continuing downward trajectory of the LEI signals headwinds to growth ahead. Despite improving compared to last year, elevated unemployment and inflation, coupled with weaker manufacturing and tighter monetary policy signal cooling economic growth ahead. The Conference Board projects Spanish real GDP growth to rise by 2.2 percent year-over-year in 2023 but will weaken in 2024.”

The Spain LEI declined in August

On a six-month basis, all components of the Spain LEI showed weakness, except for job placements and stock prices

The trajectory of the Spain LEI fell back below the threshold for recession, suggesting headwinds to growth ahead

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 -1.9 percent. The red dotted line is drawn at the threshold value (measured by the median, -1.9 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 Spain

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 3 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 six components of The Conference Board Leading Economic Index^® for Spain include: Capital Equipment, Component of Industrial Production, Spanish Contribution to Euro M2, Spanish Equity Price Index, Long Term Government Bond Yield (inverted), Order Books Survey   , and Job Placement.

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. www.tcb.org