The Conference Board Leading Economic Index® (LEI) for Korea increased 0.7 percent and The Conference Board Coincident Economic Index® (CEI) for Korea increased 0.9 percent in March.

The Conference Board LEI for Korea rose sharply in March, following a small increase in February. Large positive contributions from stock prices, the (inverted) government bond yield, and private construction orders more than offset a negative contribution from value of machinery orders. With the gain this month, the six-month growth rate in the leading economic index stands at 5.9 percent (about a 12.1 percent annual rate) in the period through March 2011, sharply up from 0.3 percent (about a 0.7 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have been widespread over the past six months.

The Conference Board CEI for Korea, a measure of current economic activity, also increased in March, following a small decline in February. The wholesale and retail sales component gained sharply, while total employment also increased. With the gain in March, the six-month growth rate of the coincident economic index also picked up — to 2.3 percent (about a 4.6 percent annual rate) in the period through March 2011, from 1.4 percent (about a 2.9 percent annual rate) for the previous six months. At the same time, real GDP grew at a 5.6 percent annual rate in the first quarter of 2011, up from the 2.0 percent growth in the fourth quarter of 2010.

The Conference Board LEI for Korea remains on the upward trend which resumed in September last year, and its six-month growth rate has picked up sharply in recent months. Meanwhile, The Conference Board CEI for Korea increased in March, and its six-month growth rate has also quickened. Taken together, the current behavior of the composite indexes and their components suggest that the current economic expansion will likely continue, and could even pick up modestly in the near term.

LEADING INDICATORS

Five of the seven components that make up The Conference Board LEI for Korea increased in March. The positive contributors – from the largest positive contributor to the smallest – were stock prices, the (inverted) yield of government public bonds, private construction orders, real exports FOB, and letter of credit arrivals. Negative contributors were value of machinery orders and the (inverted) index of inventories to shipments.

With the 0.7 percent increase in March, The Conference Board LEI for Korea now stands at 122.7 (2004=100). Based on revised data, this index increased 0.1 percent in February and increased 1.2 percent in January. During the six-month span through March, the leading economic index increased 5.9 percent, with five of the seven components advancing (diffusion index, six-month span equals 71.4 percent).

COINCIDENT INDICATORS

Three of the four components that make up The Conference Board CEI for Korea increased in March. The positive contributors - in order from the largest positive contributor to the smallest - were the wholesale and retail sales component, total employment, and monthly cash earnings. Industrial production declined in March.

With the 0.9 percent increase in March, The Conference Board CEI for Korea now stands at 115.8 (2004=100). Based on revised data, this index decreased 0.3 percent in February and increased 0.3 percent in January. During the six-month span through March, the coincident economic index increased 2.3 percent, with all four components advancing (diffusion index, six-month span equals 100.0 percent).