The Conference Board(R) Korea Business Cycle Indicators(SM) Korea Leading
Economic Indicators and Related Composite Indexes for May 2008
NEW YORK, July 9 /PRNewswire/ -- The Conference Board announced today that
the leading index for Korea declined by 1.0 percent, while the coincident
index declined 0.1 percent in May.
-- The leading index declined substantially in May, after remaining
essentially flat between February and April. Letter of credit arrivals, yield
of government bonds (inverted), real exports, index of inventories to
shipments (inverted) and value of machinery orders all made substantial
negative contributions to the index, while the stock price index made the only
positive contribution. Since November 2007, the leading index has declined by
2.9 percent (about a -5.8 percent annual rate), down sharply from an 8.2
percent annual rate of increase for the previous six months. In addition, the
weaknesses among the leading indicators have been widespread in recent months.
-- The coincident index, a measure of current economic activity, declined
slightly in May after increasing for five consecutive months. Wholesale and
retail sales made the largest negative contribution to the index. During the
past six months, the coincident index has increased by 1.1 percent (about a
2.2 annual rate), slightly below the 2.6 percent annual rate of growth for the
second half of 2007. Additionally, the strengths among the coincident
indicators have remained widespread.
-- Since October 2007, the leading index has been on a fairly steep
downward trend, while the coincident index continued to grow steadily, though
at a slower pace than during the second and third quarters of last year. At
the same time, real GDP growth has slowed from a 6.5 percent average annual
rate for the second and third quarters of 2007, to a 4.8 percent average
annual rate during the final quarter of 2007 and the first quarter of 2008
(including a 3.3 percent annual rate during the first quarter of 2008). The
recent behavior of the leading and coincident indexes continues to suggest
that the economy is likely to grow at a slow to moderate pace in the near
term.
LEADING INDICATORS. One of the seven components that make up the leading
index increased in May. The only positive contributor was stock prices.
Negative contributors -- from the largest negative contributor to the smallest
-- were letter of credit arrivals, the (inverted) yield of government public
bonds, real exports FOB, the (inverted) index of inventories to shipments,
value of machinery orders, and private construction orders.
With the 1.0 percent decrease in May, the leading index now stands at
174.9 (1990=100). Based on revised data, this index increased 0.1 percent in
April and declined 0.1 percent in March. During the six-month span through
May, the leading index decreased 2.9 percent, with two of the seven components
advancing (diffusion index, six-month span equals 28.6 percent).
COINCIDENT INDICATORS. Two of the four components that make up the
coincident index increased in May. The positive contributors to the leading
index -- in order from the largest positive contributor to the smallest --
were total employment, and monthly cash earnings*. The wholesale and retail
sales component, and industrial production declined.
With the 0.1 percent decrease in May, the coincident index now stands at
171.9 (1990=100). Based on revised data, this index increased 0.3 percent in
April and increased 0.3 percent in March. During the six-month span through
May, the coincident index increased 1.1 percent, with all four components
advancing (diffusion index, six-month span equals 100.0 percent).
ABOUT THE CONFERENCE BOARD. Founded in 1916, The Conference Board is the
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source of forecasts, economic analysis and objective indicators such as the
Leading Economic Indicators and the Consumer Confidence Index.
This role is part of a long tradition of research and education that
stretches back to the compilation of the first continuous measure of the cost
of living in the United States in 1919. In 1995, The Conference Board assumed
responsibility for computing the composite indexes from the U.S. Department of
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Summary Table of Composite Indexes
2008 6-month
Mar Apr May Nov to May
Leading index 176.4 176.6 174.9 p
Percent Change -0.1 0.1 p -1.0 -2.9 p
Diffusion 42.9 57.1 p 14.3 28.6
Coincident Index 171.6 p 172.1 r 171.9 p
Percent Change 0.3 0.3 r -0.1 p 1.1 p
Diffusion 87.5 100.0 37.5 100.0
n.a. Not available p Preliminary r Revised
Indexes equal 100 in 1990
Source: The Conference Board All Rights Reserved
For more information visit our Website:
www.conference-board.org/economics/bci/
The next release is scheduled for Wednesday, August 6, 2008 at 9:00 P.M. (ET)
In Korea -- Thursday August 7, 2008 at 10:00 A.M. (KOR)
SOURCE The Conference Board
Professional Contacts at The Conference Board, Indicator Program,
+1-212-339-0330; Media Contacts, Frank Tortorici, +1-212-339-0231, Carol
Courter, +1-212-339-0232
