China LEI Increases: "Economic expansion should continue short-term"

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The Conference Board: China Monthly Leading Economic Index

China Monthly LEI & CEI

Current Leading Index: 257.5
Current Coincident Index: 234.9
Post-Recession LEI High: 257.5 (February 2013)
Post-Recession CEI High: 234.9 (February 2013)



Says Andrew Polk, resident economist at The Conference Board China Center in Beijing: “The Leading Economic Index for China maintained its pace in February, a sign that the current economic expansion should continue in the near-term. Current economic conditions strengthened considerably compared to previous months. However, the six-month average growth rate of the LEI has weakened. The drivers of growth remain fragile, and recent improvements in consumer expectations are not likely sustainable in the face of rising inflation. Investment activity, which is also underpinning the current growth rebound, is heavily credit dependent and could be affected by changes in monetary policy in the wake of the leadership transition.”

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China LEI Increases: "Economic rebound continues to look modest"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI

Current Leading Index: 253.4
Current Coincident Index: 233.7
Post-Recession LEI High: 253.4 (January 2013)
Post-Recession CEI High: 233.7 (January 2013)



Says Andrew Polk, resident economist at The Conference Board China Center in Beijing: “January’s acceleration in the LEI was driven primarily by consumer expectations and estimated real estate activity, both of which were likely positively affected by the Chinese New Year holiday. Credit extension also contributed to the increase in the LEI. Despite the seasonal uptick in some components, recent gains in the LEI have become less widespread and the current rebound in economic activity continues to look modest.”

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China LEI Increases: "Momentum may already be abating"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI

The current December 2012 reading is a post-recession high.



“Growth in the LEI for China slowed in December. A decline in real estate activity, a drop in new export orders, and weak consumer confidence accounted for the slowing, while credit extension and improved conditions in the manufacturing supply chain offered only little support,” says Andrew Polk, resident economist at The Conference Board China Center in Beijing. “Growth in the CEI moderated as well, underscoring the notion that economic momentum may already be abating, and is unlikely to rebound much further in 2013. We expect China to grow at 7.5 percent this year, slightly down from the 7.8 percent increase in 2012.”

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China LEI Increases: "Economic rebound still appears fragile"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI

The current November 2012 reading is a post-recession high.



“Strength in China’s current economic activity has been maintained in November and all of the components in the Coincident Economic Index now posted gains,” says Andrew Polk, resident economist at The Conference Board China Center in Beijing. “However, growth in the leading index decelerated slightly as real estate activity, consumer confidence and new export orders all contributed less to LEI growth in November than in October. Credit creation in the banking system remains the only consistent positive contributor to the LEI since early 2011. As a result, the sustainability of a broad based economic rebound still appears fragile heading into 2013.”

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China LEI Surges: "Moderate rebound underway"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI

The current October 2012 reading is a post-recession high.



“The LEI picked up momentum in October, suggesting a moderate rebound is underway that may carry into the first half of 2013,” says Andrew Polk, resident economist at The Conference Board China Center in Beijing. “Growth was driven primarily by renewed real estate activity and upbeat consumer expectations, two areas which have been highly volatile in recent months. As such, the strength and sustainability of the economy’s acceleration remains questionable. Meanwhile, the CEI showed its strongest and broadest growth in several months, aligning with a raft of recent data suggesting that the cyclical slowdown, which began in the second half of 2011, has likely passed its trough.”

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China LEI Edges Up: "Near-term outlook continues to be uncertain"

The Conference Board: China Monthly Leading Economic Index

The September 2012 China Monthly Leading Economic Index rose a slight +0.3 and +0.29% to 241.2 (preliminary), another post-recession high. The China Monthly Coincident Economic Index increased for the 5th consecutive month. Overall, continuing economic growth is forecast, but volatility and uncertainty has increased.

China Monthly LEI The current September 2012 reading is a post-recession high.



Andrew Polk, resident economist at The Conference Board China Center in Beijing, said "The LEI’s very modest pickup in September, due in large part to a heavy drag from real estate, points to an economy that is unlikely to pick up rapidly in the near term. Credit extension and some tentative stabilization in the manufacturing sector buoyed the index – along with slightly improved export orders going into the West’s holiday season."

"The real estate sector’s strong performance in August does not appear to have extended into September, a traditionally strong month for real estate transactions. Sharp increases in government-sponsored infrastructure spending should continue in the coming months, helping to support industrial and manufacturing activity, even as real estate activity remains weak. These volatile movements illustrate that the near-term outlook continues to be uncertain."

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China LEI Spikes: "Raises expectations for moderate rebound in growth"

The Conference Board: China Monthly Leading Economic Index

The August 2012 China Monthly Leading Economic Index rose a strong +4.0 and +1.69% to 240.4 (preliminary), another post-recession high. The China Monthly Coincident Economic Index increased for the 4th consecutive month. Overall, continuing economic growth is forecast, but volatility and uncertainty has increased.

China Monthly LEI The current August 2012 reading is a post-recession high.



Andrew Polk, resident economist at The Conference Board China Center in Beijing, said "The improvement in the China LEI in August raises expectations for a moderate rebound in growth, even as current economic conditions remain subdued. The LEI’s largest increase in seven months was primarily due to a rebound in real estate activity, with strong credit growth and an improvement in consumer expectations also adding to the uptick. The manufacturing and trade sectors continued to underperform. Despite the somewhat improved outlook, recent LEI trends suggest the rebound in real estate may be tenuous and uncertainty around credit-led growth remains a concern."

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China LEI Rises: "Main driver was government loans"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI The current July 2012 reading is a post-recession high and an increase in the growth rate.



Andrew Polk, resident economist at The Conference Board China Center in Beijing, said "The Conference Board LEI for China increased again in July. The main driver was government loans to boost banks in financing infrastructure investment. Falling prices gave an important boost to loan growth, as the latter was measured in real terms. The small increase in the CEI, a measure of current conditions, reflects some improvement in industrial production, retail sales and electricity production, suggesting that current economic conditions are stabilizing. Although other leading indicators, such as real estate, exports and consumer sentiment, remained weak through July, the leading and current indicators point to a modest rebound in the second half of 2012."

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China LEI Rises: "Stabilization of economy will remain tenuous"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI The current June 2012 reading is a post-recession high, but growth is slowing.



Andrew Polk, resident economist at The Conference Board China Center in Beijing, said "In June, the month-on-month growth rate of the China LEI slowed significantly with all components except bank loans declining. Overall, the short term trend in the leading economic index indicates that economic activity is still policy - and credit -led. Bank credit expansion has been the only consistently rising leading index component over the last six months. Coupled with slowing and volatile (month-on-month) growth in the CEI for China, the composite indexes suggest that the real economy is not showing any material rebound, and that this situation is likely to persist for several months to come. Until monetary loosening passes through to fuel real economic activity and boost private sector demand, the stabilization of the economy will remain tenuous"

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China LEI Rises: "Signals a moderate growth rebound"

The Conference Board: China Monthly Leading Economic Index

China Monthly LEI The current May 2012 reading is a post-recession high.



Andrew Polk, resident economist at The Conference Board China Center in Beijing, said "The China LEI rose in May, driven by the rebound in bank loans and real estate activity. While exports remain subdued, bank credit has picked up recently on fiscal and monetary policy measures designed to support growth and boost demand for loans. Current economic conditions, gauged by the CEI for China, improved somewhat from April, but the rate of growth so far this year has been tepid, and both consumer and producer prices fell sharply in May, suggesting weak domestic demand. Taken together, the economy will continue to face strong headwinds from the softness in both external and domestic demand, but the LEI signals a moderate growth rebound based on policy support."



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China LEI Rises: "Sends mixed message"

The Conference Board: China Monthly Leading Economic Index

The April 2012 China Monthly Leading Economic Index rose +1.9 and +0.82% to 232.4 (preliminary), another post-recession high. The China Monthly Coincident Economic Index decreased for the 2nd month in the past 4 months. Overall, continuing economic growth is forecast, but volatility and uncertainty has increased. Notable was electricity output and industrial output decreased.

Andrew Polk, resident economist at The Conference Board China Center in Beijing, said "The China LEI in April once again sends a mixed message. While the composite index continued to increase, the strength in the underlying indicators was very much concentrated in bank loans and consumer sentiment. However, leading indicators in manufacturing and real estate sectors showed significant slowing in April. In contrast to the LEI, the coincident economic index for China, which looks at current economic conditions, fell for the second time in the last six months, with key indicators such as electricity production and industrial output declining. Thus, while the top line LEI growth continues to signal a moderate expansion ahead, the pattern of offsetting strengths and weaknesses among the underlying indicators suggests volatility and uncertainty, exacerbating weakening current conditions in the economy."

China Monthly LEI The current April 2012 reading is a post-recession high.



USA LEI Dips: “Economy still struggling to gain momentum”

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China Leading Economic Index Rises: "Economy unlikely to strengthen further in coming months"

The Conference Board: China Monthly Leading Economic Index

China Monthly Leading Economic Index The February 2012 China LEI rose a +1.7 and +0.75% to 227.2 (preliminary), another post-recession high. Overall, continuing economic growth is forecast. The LEI has been revamped with benchmark revisions, 2004 = 100.00, and only limited data is available.

China Leading Economic Index by Month The current February 2012 reading is a post-recession high.

China Leading Economic Index Rises to New High! (Chart) "Economic activity in China remains robust"

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The Conference Board: China Monthly Leading Economic Index

Official Statement by The Conference Board (Beijing, November 17, 2011) The Conference Board Leading Economic Index (LEI) for China increased 0.4 percent in September to 160.2 (2004 = 100), following a 0.6 percent increase in both August and July. Four of the six components contributed positively to the index in September. Says The Conference Board China Center resident economist Andrew Polk: “Economic activity in China remains robust, but that pace of growth should continue to ease in the near term, according to the China LEI in September. Policy tightening, particularly in real estate, has persisted in cooling the main drivers to growth throughout this year - property investment and bank loans - and weakness in developed markets continues to weigh on external demand for China, adding another drag to growth. ”

Trend The short-term trend has been upwards with 9 consecutive monthly increases. The intermediate-term trend and the long-term trend continues upwards.

Cycle History (Beginning in January 2010) The intermediate-term and cyclical high has been the current 160.2 in September 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 is at a new high of 160.2 (preliminary) in September 2011. Some of the prior months were revised downwards slightly. Overall, continuing economic growth is forecast in the near-term. 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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