Global Leading Indicators

The Conference Board Leading Economic Index^®(LEI) for Spain increased slightly by 0.1 percent in January 2023 to 96.0 (2016=100), after declining by 0.4 percent in December last year. The LEI decreased by 2.2 percent in the six-month period from July 2022 to January 2023, after falling by 2.5 percent in the six-month period between January and July 2022.

The Conference Board Coincident Economic Index^® (CEI) for Spain held steady in January 2023 at 106.8 (2016=100), remaining at the same level since November. The CEI contracted by 1.1 percent in the six-month period between July 2022 and January 2023, reversing much of the 1.8 percent growth over the previous six-month period.

“The LEI for Spain ticked up in January of this year, driven by higher stock prices and industrial production of capital equipment,” said Allen Li, Associate Economist at The Conference Board. “Nonetheless, the level of the LEI still remains depressed after persistent declines in 2022.  Its recent trajectory also suggests that risk of a downturn in the near term remains elevated. While inflation in the Spanish economy is down from its peak in 2022, it remains elevated, and the labor market has yet to pick up strongly. While the latest data show that real GDP growth in Spain was positive at the end of 2022, The Conference Board projects real GDP growth in Spain will be flat in Q1 ‘23 before picking up later in the year.”

The Spain LEI increased slightly in January

Higher stock prices and industrial production of capital equipment led the uptick in LEI at the start of 2023

The growth trajectory of the Spain LEI may have bottomed, but recession risks remain

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.conference-board.org • Learn more about our mission and becoming a member