Wednesday, June 15, 2011

China Monthly Leading Economic Index at New High! (Chart) "Slower trend consistent with moderate growth"

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The Conference Board: China Monthly Leading Economic Index

Official Statement by The Conference Board Beijing, June 15, 2011 - The Conference Board Leading Economic Index (LEI) for China increased 0.2 percent in April to 154.5 (2004 = 100), following a 0.9 percent increase in March and a 0.1 percent decline in February. Two of the six components contributed positively to the index in April. Says The Conference Board China Center resident economist Bill Adams: “The China LEI’s recent slower trend is consistent with more moderate growth in economic activity in coming months. The LEI for China has increased modestly in the early months of 2011, supported by expansion in credit and construction activity despite weakness in consumer expectations and production indicators. Cooler economic conditions in the U.S. and Europe have also contributed to weaker conditions for the export sector since the beginning of the year.”

Revisions & Trend The Conference Board LEI for China increased slightly in April, and there were downward revisions to the index for the past several months as data for the 5000 industry enterprises diffusion index: raw materials supply index became available. The weaknesses among the leading indicators were slightly more widespread than the strengths this month. Despite the small gain in April, the six-month change in the leading economic index turned negative – to -0.1 percent (a -0.1 percent annual rate) between October 2010 and April 2011, substantially below the increase of 5.2 percent (a 10.6 percent annual rate) for the previous six months. Moreover, the strengths and weaknesses among the leading indicators have become balanced, with the number of components rising just equal to the number falling in recent months.

Trend The short-term trend has been upwards with 2 consecutive monthly increases. The intermediate-term (6 months) trend is mostly level and the long-term (12 months) trend continues upwards.

Cycle History (Beginning in January 2010) The intermediate-term and cyclical high has been 154.5 in April 2011. The intermediate-term and cyclical low has been 142.8 in January 2010.

China Monthly Leading Economic Index (Chart) Below is a chart of the China Monthly Leading Economic Index from January 2010 through the latest month reported.

Commentary The China Monthly Leading Economic Index was revised downwards back to November 2010, as noted above. The April 2011 Monthly Leading Economic Index of 154.5 is a new high, exceeding the previous November 2010 peak of 154.4. Overall, moderate economic growth is forecast. A small slowdown in 2011 compared to the strong 2010 GDP growth (+10.3% YoY) is anticipated. China is now the second largest economy in the world as reviewed here [China Now Second Largest Economy in the World (Video, GDP Chart) *Surpasses Japan as #2*]

About The Conference Board Leading Economic Index (LEI) for China The Conference Board Leading Economic Index (LEI) for China was launched in May 2010. Plotted back to 1986, this index has successfully signaled turning points in the economic cycles of China. The six components of The Conference Board Leading Economic Index for China include:
* Total Loans Issued by Financial Institutions (source: People’s Bank of China)
* 5000 Industry Enterprises Diffusion Index: Raw Materials Supply Index (source: People’s Bank of China)
* NBS Manufacturing PMI Sub-Indices: PMI Supplier Deliveries (source: National Bureau of Statistics)
* Consumer Expectations Index (source: National Bureau of Statistics)
* Total Floor Space Started (source: National Bureau of Statistics)
* NBS Manufacturing PMI Sub-Indices: Export Orders (source: National Bureau of Statistics)

About The Conference Board The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.

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