The Conference Board Leading Economic Index® for China Increased in December

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Jan 18, 2012, 09:00 ET

BEIJING, Jan. 18, 2012 /PRNewswire/ -- The Conference Board Leading Economic Index® (LEI) for China increased 0.7 percent in December to 222.0 (2004 = 100), following a 0.5 percent increase in November and a 0.4 percent increase in October. Five of the six components contributed positively to the index in December.

"December's monthly increase in the LEI for China was in part due to seasonal factors, as firms ramped up production ahead of the Chinese New Year holiday. Increased bank lending and an uptick in consumer sentiment also contributed to the reading in December, as liquidity conditions eased somewhat," says Andrew Polk, resident economist of The Conference Board in Beijing. "However, the LEI growth has been slowing gradually over the last six months, and strengths and weaknesses among the leading indicators have become balanced. While this trend indicates that economic growth will continue to slow in the first quarter of 2012 on weak external demand and previous policy tightening, the government's shifting focus from inflation control to growth support should herald continued gradual policy easing, putting a floor under the deceleration."

The Conference Board Coincident Economic Index® (CEI) for China, which measures current economic activity, increased 0.8 percent in December to 215.4 (2004 = 100), following a 1.1 percent increase in November and remained unchanged in October. All five components contributed positively to the index in December.

The Conference Board LEI for China aggregates six economic indicators that measure economic activity in China. Each of the LEI components has proven accurate on its own. Aggregating individual indicators into a composite index filters out so-called "noise" to show underlying trends more clearly.

This month's release incorporates annual benchmark revisions to the composite economic indexes. These regular benchmark revisions bring the indexes up-to-date with revisions in the source data. The 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 incorporated when the benchmark revision is made and the entire histories of the indexes are recomputed. As a result, the revised indexes and their month-over-month changes will no longer be directly comparable to those issued prior to the benchmark revision.

In addition to the regular benchmark revisions, this month's release also incorporates a new trend adjustment procedure. Also, starting with the January 2012 release, the monthly press releases of The Conference Board Leading Economic Index® (LEI) and The Conference Board Coincident Economic Index® (CEI) for China will follow a new schedule: each month's release will now report data from the previous month, rather than the data from two months ago.

For further details please see page 3 in the technical notes. For more information, please visit our website at http://www.conference-board.org/data/bci.cfm or contact [email protected].

About The Conference Board Leading Economic Index® (LEI) for China

The Conference Board Leading Economic Index® 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 Conference Board also produces LEIs for Australia, the Euro Area, France, Germany, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States.

The six components of The Conference Board Leading Economic Index® (LEI) 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)

For more information including full press release and technical notes:
http://www.conference-board.org/data/bcicountry.cfm?cid=11

To view The Conference Board calendar of 2011 indicator releases:
http://www.conference-board.org/data/

* The series in The Conference Board LEI for China that is based on our estimates is the 5000 industry enterprises diffusion index: raw materials supply index. There are no series in The Conference Board CEI for China that are based on our estimates.

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. www.conference-board.org.

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Summary Table of Composite Economic Indexes

	2011				6-month
	Oct	Nov	Dec		Jun to Dec

Leading Economic Index (LEI)	219.3	220.4	222.0	p
Percent Change	0.4	0.5	0.7	p	4.5
Diffusion	33.3	58.3	83.3		50.0

Coincident Economic Index (CEI)	211.2	213.6	215.4	p
Percent Change	0.0	1.1	0.8	p	3.3
Diffusion	50.0	100.0	100.0		100.0

n.a. Not available p Preliminary r Revised
Indexes equal 100 in 2004
Source: The Conference Board All Rights Reserved