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 rose slightly by 0.1 percent in January 2024 to 98.1 (2016=100), following a 0.3 percent increase in December 2023. Due to the recent improvements, the six-month rate of decline has eased to -0.2 percent between July 2023 and January 2024 from -0.7 percent over the previous 6 months period.

 The Conference Board Coincident Economic Index^® (CEI) for Spain increased by 0.2 percent in January 2024 to 111.2 (2016=100), more than offsetting a decline of 0.1 percent in December of last year. The CEI grew by 0.5 percent over the six-month period between July 2023 and January 2024, a much slower growth rate than the 1.7 percent increase over the previous six-month period ending in July 2023.

“The LEI for Spain improved for a third consecutive month in January, suggesting a reversal of the downward trend observed over the past two years,” said Allen Li, Associate Economist at The Conference Board. “January’s gain was driven by positive developments in the order books survey, Spanish contribution to Euro M2, and job placement. The rebound of LEI suggests that Spain is likely to continue to outperform major Euro Area economies in the near term. The Conference Board currently expects real annual GDP growth for Spain at 1.9 percent for 2024.”

The Spain LEI increased further in January

January’s improvement was driven by gains in order books survey, Spanish contribution to Euro M2, and job placement 

The Spain LEI no longer signaled recession 

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 -1.7 percent. The red dotted line is drawn at the threshold value (measured by the median, -1.7 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. ConferenceBoard.org