The Conference Board Leading Economic Index® (LEI) for China increased 0.3 percent in January to 155.0 (2004 = 100), following a 0.5 percent decline in December and a 0.5 percent increase in November. Two of the six components contributed positively to the index in January.

The Conference Board LEI for China increased in January, following a large decline in December, but the weaknesses among the leading indicators were more widespread than the strengths. A large positive contribution from total floor space started more than offset the large negative contribution from total loans. With the small gain in January, the six-month growth rate of the Leading Economic Index continued to moderate, to 2.4 percent (a 5.0 percent annual rate) from July 2010 to January 2011, down from 4.4 percent (a 9.0 percent annual rate) for the previous six months. However, the strengths among the leading indicators remained slightly more widespread than the weaknesses over the last six months.

The Conference Board CEI for China, a measure of current economic activity, rose sharply in January, and last month’s decline was revised up to a small increase mainly as a result of upward revisions in retail sales and electricity production. All of the coincident indicators, except for value-added of industrial production, advanced this month. Despite the increase in January, the six-month growth rate of the coincident economic index has also moderated – to 4.9 percent (a 9.9 percent annual rate) in the period through January 2011, down from 6.7 percent (a 13.8 percent annual rate) for the previous six months. Nonetheless, the strengths among the coincident indicators have remained very widespread in recent months.

The Conference Board LEI for China resumed increasing in January, after declining in December last year. However, its six-month growth rate continued to slow. Meanwhile, The Conference Board CEI for China has continued to increase, but its six-month growth rate has moderated as well. While it is still too early to tell, the slowing trends in the composite indexes suggest that economic activity will likely grow at a more moderate pace in the near term.

LEADING INDICATORS

Two of the six components that make up The Conference Board LEI for China increased in January. The positive contributors to the index – in order from the larger positive contributor - include total floor space started and the 5000 industry enterprises diffusion index: raw materials supply index. Total loans issued by financial institutions, PMI new export orders, the consumer expectations index, and the (inverted) PMI supplier delivery index decreased in January.

With the increase of 0.3 percent in January, The Conference Board LEI for China now stands at 155.0 (2004=100). This index declined 0.5 percent in December and increased 0.5 percent in November. During the six-month span through January, The Conference Board LEI for China increased 2.4 percent, and three of the six components advanced (diffusion index, six-month span equals 66.7 percent).

COINCIDENT INDICATORS

Four of the five components that make up The Conference Board CEI for China increased in January. The positive contributors to the index – in order from the largest positive contributor to the smallest – include volume of passenger traffic, electricity production, retail sales of consumer goods, and manufacturing employment. Value-added of industrial production declined in January.

With the increase of 1.4 percent in January, The Conference Board CEI for China now stands at 200.8 (2004=100). Based on revised data, this index increased 0.1 percent in December and increased 1.0 percent in November. During the six-month span through January, The Conference Board CEI for China increased 4.9 percent, and all five components advanced (diffusion index, six-month span equals 100.0 percent).