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 0.3 percent in June 2023 to 95.8 (2016=100), following no change in May. The LEI contracted moderately by 0.2 percent in the six-month period from December 2022 to June 2023, a significantly smaller rate of contraction compared to -2.2 percent over the six-month period between June and December 2022.

The Conference Board Coincident Economic Index^® (CEI) for Spain remained flat in June 2023 at 109.5 (2016=100), after increasing by 0.4 percent in May. The CEI increased by 2.1 percent in the six-month period between December 2022 and June 2023, a reversal from a decrease of 0.7 percent over the previous six-month period.

“The LEI for Spain slipped in June, after being roughly flat for much of this year,” said Allen Li, Associate Economist at The Conference Board. “Nonfinancial components of the LEI for Spain contributed negatively in June, more than offsetting a rise in equities. Limited movement in the LEI bodes unfavorably for a pickup in growth ahead.  Looking ahead, the Conference Board expects moderate growth in the second half of this year, with Spanish real GDP growth forecasted to rise by 2.2 percent year-over-year in 2023, from 5.5 percent in 2022.”

The Spain LEI slipped in June

All non-financial components of the LEI for Spain contributed negatively in June, more than offsetting rising equities                   

The Spain LEI is no longer signaling recession, but remains in negative territory pointing to modest 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