Global Leading Indicators

This month’s release of the composite economic indexes incorporates annual benchmark revisions which bring them up-to-date with revisions in the source data. These revisions do not change the cyclical properties of the indexes. The indexes are updated throughout the year, but only for the previous six months. Data revisions that fall outside of the moving six-month window are not incorporated until the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes, in levels and month-on-month changes, will not be directly comparable to those issued prior to the benchmark revision.

For more information, please visit https://www.conference-board.org/topics/business-cycle-indicators/ or contact us at indicators@conference-board.org.

The Conference Board Leading Economic Index^®(LEI) for Spain remained unchanged in November 2022 at 96.3 (2016=100), after declining by 0.4 percent in October. The LEI decreased by 3.1 percent in the six-month period from May to November 2022, after decreasing by 1.1 percent in the six-month period between November 2021 and May 2022.

The Conference Board Coincident Economic Index^® (CEI) for Spain also remained unchanged in November 2022 at 107.8 (2016=100), after declining by 0.3 percent in October. The CEI grew by 0.4 percent in the six-month period between May and November 2022, compared to 1.4 percent growth over the previous six-month period.

“The Spain LEI held steady in November, as financial components turned positive, offsetting negative contributions from non-financial components,” said Allen Li, Associate Economist at The Conference Board. “Inflation in the Spanish economy is down considerably from its peak in July, but higher interest rates and weakening growth prospects in Europe and around the world still pose risks to continued growth. The Conference Board projects real GDP growth in Spain was flat in Q4 ’22, and will remain so for Q1 ‘23, before picking back up later in the spring.”

Across-the-board weaknesses contributed to the LEI’s decline over the past 6 months, but financial components improved recently

The declining trajectory of the LEI suggests recession risks remain in the near term 

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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 -1.8 percent. The red dotted line is drawn at the threshold value (measured by the median, -1.8 percent) on the months when both criteria are met simultaneously. Thus, the red dots signal a recession.

The composite business cycle indexes pre- and post- benchmark revisions: 1984-present

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

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