Global Leading Indicators

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The Conference Board Leading Economic Index^®(LEI) for Spain declined by 0.4 percent in October 2023 to 94.0 (2016=100), following a 0.2 percent decrease in September. The LEI contracted by 2.2 percent in the six-month period from April to October 2023, a faster rate of decline than the 0.3 percent contraction over the six-month period between October 2022 and April 2023.        

 The Conference Board Coincident Economic Index^® (CEI) for Spain ticked down by 0.1 percent in October 2023 to 109.3 (2016=100), after remaining unchanged in September. The CEI grew by 0.3 percent in the six-month period between April and October 2023, a much slower pace of progress than the 1.7 percent increase over the previous six-month period.

“The LEI for Spain declined for a fifth consecutive month in October, continuing a downward trend since May of this year,” said Allen Li, Associate Economist at The Conference Board. “The negative trajectory of the leading index is signaling slower economic growth heading into 2024. Over the past six months, components of the Spain LEI slumped across the board due to tighter monetary policy. The Conference Board currently expects real GDP growth in Spain to rise by 2.2 percent year-over-year in 2023, and slow substantially to 0.8 percent in 2024.”

The Spain LEI declined for a fifth consecutive month in October  

The Spain LEI declined in October due to negative contributions from every component, with the exception of capital equipment

The downward trajectory of the Spain LEI is signalling slower economic growth in the near term

 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