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Global Business Cycle Indicators


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Benchmark Revisions - January 2008

Press Release Archive

Released: Tuesday, September 25, 2007

The Conference Board announced today that the leading index for Australia increased 0.3 percent and the coincident index increased 0.2 percent in July.

  • The leading index increased again in July, due mainly to the continued strength in real money supply (M3). The index was revised downwards from March through May as a result of newly available data for quarterly components, including gross operating surplus (private, non-financial corporations), despite several smaller upward revisions in other components. The leading index increased 2.4 percent from January to July (a 4.9 percent annual rate), down from a recent high in the six month rate of change of 3.2 percent in March (a 6.4 percent annual rate). In addition, the strengths among the leading indicators have been slightly more widespread than weaknesses in recent months.
  • The coincident index also continued to increase in July, with retail trade, employed persons and household gross disposable income providing positive contributions for the month. The coincident index remains on a steady upward trend that began in early 2006, and the strengths among its components continue to be very widespread.
  • Based on revised data, the rate of growth for the leading index has gradually moderated since March, and the expansion in the coincident index has held steady so far. At the same time, real GDP expanded at a 3.8 percent annual rate in the second quarter of 2007, down from the rapid growth of 6.5 percent annual rate in the first quarter. The recent behavior of the leading and coincident indexes suggests that moderate to strong economic activity is likely to continue in the near term.

LEADING INDICATORS. Five of the eight components in the leading index increased in July. The positive contributors to the index — in order from the largest positive contributor to the smallest — are money supply*, the sales to inventories ratio*, yield spread, the (inverted) "medium-term" government bond yield, and gross operating surplus*. Share prices and rural goods exports* declined, while building approvals* was unchanged in July.

With the 0.3 percent increase in July, the leading index now stands at 171.9 (1990=100). Based on revised data, this index increased 0.4 percent in June and increased 0.2 percent in May. During the six-month period through July, the leading index increased 2.4 percent, and five of the eight components increased (diffusion index, six-month span equals 68.8 percent).

COINCIDENT INDICATORS. Three of the five components in the coincident index increased in July. The increases — in order from the largest positive contributor to the smallest — occurred in retail trade, employed persons, and household gross disposable income*. None of the components declined in July.

With the increase of 0.2 percent in July, the coincident index now stands at 122.4 (1990=100). Based on revised data, this index increased 0.2 percent in June and increased 0.2 percent in May. During the six-month period through July, the coincident index increased 1.2 percent, with all five components in the series making positive contributions (diffusion index, six-month span equals 100.0 percent).

DATA AVAILABILITY. The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. ET on September 24, 2007. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals, and the CPI used to deflate money supply M3. Series in the coincident index that are based on The Conference Board estimates are industrial production and household disposable income. CPI was used to deflate retail trade.