The Conference Board CEI for Korea, a measure of current economic activity, also decreased in October. Industrial production fell sharply, and total employment also made a negative contribution to the index. In the six-month period through October, the coincident economic index increased by 2.4 percent (a 4.8 percent annual rate), a reversal from the 1.8 percent decline (about a -3.5 percent annual rate) for the previous six months. At the same time, real GDP has continued to expand, by 12.3 percent (annual rate) in the third quarter of 2009, following an average increase of 5.6 percent (annual rate) for the first half of the year.
After rising sharply since February this year, The Conference Board LEI and The Conference Board CEI for Korea both fell in October, and their six-month growth rates also slowed. Taken together, the current behavior of the composite indexes and their components suggests that the economy will continue to recover, but likely at a modest pace in the near term.
LEADING INDICATORS
Three of the seven components that make up The Conference Board LEI for Korea increased in October. The positive contributors – from the largest positive contributor to the smallest – were private construction orders, real exports FOB, and letter of credit arrivals. Negative contributors – from the largest negative contributor to the smallest – were the (inverted) index of inventories to shipments, stock prices, value of machinery orders, and the (inverted) yield of government public bonds.
With the 0.2 percent decrease in October, The Conference Board LEI for Korea now stands at 108.7 (2004=100). Based on revised data, this index increased 2.4 percent in September and increased 0.1 percent in August. During the six-month span through October, the leading economic index increased 5.7 percent, with six of the seven components advancing (diffusion index, six-month span equals 85.7 percent).
COINCIDENT INDICATORS
Two of the four components that make up The Conference Board CEI for Korea increased in October. The positive contributors – in order from the larger positive contributor to the smaller – were the wholesale and retail sales component and monthly cash earnings. Industrial production and total employment declined in October.
With the 0.4 percent decrease in October, The Conference Board CEI for Korea now stands at 108.3 (2004=100). Based on revised data, this index increased 0.9 percent in September and increased 0.1 percent in August. During the six-month span through October, the coincident economic index increased 2.4 percent, with three of the four components advancing (diffusion index, six-month span equals 75.0 percent).
