Global Leading Indicators

The Conference Board Leading Economic Index^®(LEI) for Spain increased by 0.3 percent in March 2023 to 96.1 (2016=100), reversing its 0.3 percent decline in February. The LEI decreased by 0.6 percent in the six-month period from September 2022 to March 2023, at a much slower pace than the decline of 3.3 percent in the six-month period between March and September 2022.

The Conference Board Coincident Economic Index^® (CEI) for Spain improved by 0.5 percent in March 2023 to 108.8 (2016=100), after a similar increase in February. The CEI grew by 1.0 percent in the six-month period between September 2022 and March 2023, continuing the growth of 1.1 percent over the previous six-month period.

“The LEI for Spain increased in March, and all non-financial components improved, outweighing slight weaknesses in financial components” said Allen Li, Associate Economist at The Conference Board. “The Spain LEI appeared to form a trough in the first quarter of 2023, suggesting growth prospects for the economy in the months ahead could be improving despite headwinds. Energy price increases eased early this year, but inflation remains elevated, amid higher interest rates. The Conference Board recently upgraded its Spanish year-over-year real GDP growth forecast to 2.0 percent in 2023 from 1.1 percent.”

The Spain LEI increased in March

All non-financial components of the Spain LEI rose, offsetting weaknesses in financial components

Trajectory of the Spain LEI improved but it remains negative

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.

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About The Conference Board

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