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 remained unchanged in April 2023 at 96.1 (2016=100), following  no change in April, based upon revised data. The LEI contracted moderately by 0.2 percent in the six-month period from November 2022 to May 2023, a relative improvement compared to the decline of 3.1 percent in the six-month period between May and November 2022.

The Conference Board Coincident Economic Index^® (CEI) for Spain improved by 0.3 percent in May 2023 to 109.5 (2016=100), after increasing by 0.5 percent in April. The CEI grew by 2.4 percent in the six-month period between November 2022 and May 2023, a reversal from a decrease of 0.5 percent over the previous six-month period.

“The LEI for Spain was flat in May for the second consecutive month,” said Allen Li, Associate Economist at The Conference Board. “The Spain LEI appears to be holding steady for much of the first half of 2023, suggesting growth in the economy will continue, albeit at a moderate pace. The rising trend of the CEI confirms that conditions in the Spanish economy have been firming. Falling inflation and a stronger labor market should help support this narrative. The Conference Board recently upgraded its Spanish real GDP growth forecast to 2.2 percent year-over-year in 2023, from 2.0 percent previously.”

The Spain LEI remained flat in May

Non-financial components of the LEI for Spain have recovered, but financial components lag

The trajectory of the Spain LEI improved, and no longer signals 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 -1.9 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