The Conference Board reports today that both the leading and the coincident indexes for France increased 0.1 percent in September.

• The leading index increased slightly in September, and as a result, the leading index has continued fluctuating around a flat or slightly rising trend since early this year. While the leading index has clearly not been rising rapidly, the slight increase this year is an improvement following the significant decline that occurred in the second half of 2002.
• The coincident index, a measure of current economic activity, increased slightly in September. Consistent with the behavior of the leading index, the coincident index has been essentially flat in recent months following slight declines earlier in the year.
• The improvement in the leading index since early this year is signaling a mild upturn in real GDP in the second half of 2003 following slight declines over the previous three quarters (a -0.6 percent average annual rate).

LEADING INDICATORS. Five of the ten components of the leading index increased in September. The positive contributors to the index -in order from the largest positive contributor to the smallest- are building permits (residential), personal consumption of manufacturing goods, the stock price index, the yield spread, and change in stocks*. Four of the ten components in the leading index decreased in September. The negative contributors to the index-in order from the largest negative contributor to the smallest-are inverted new unemployment claims, industrial new orders, the inverted bond yield, and the ratio of the deflator of manufacturing value added to unit labor cost for manufacturing*. The consumer confidence index (opinion balance) remained unchanged in September.

With the increase of 0.1 percent in September, the leading index now stands at 101.5 (1990=100). Based on revised data, this index decreased 0.2 percent in August and increased 0.4 percent in July. During the six-month span through September, the leading index increased 0.3 percent, and five of the ten components increased (diffusion index, six-month span equals 50 percent).

COINCIDENT INDICATORS. Three of the components of the coincident index increased in September. The positive contributors to the index are retail sales, industrial production, and real imports*. Paid employment* stayed unchanged in September.

With the increase of 0.1 percent in September, the coincident index now stands at 114.5 (1990=100). Based on revised data, this index decreased 0.1 percent in August and increased 0.1 percent in July. During the six-month period through September, the coincident index decreased 0.2 percent, with only one of the four series making a positive contribution (diffusion index, six-month span equals 25.0 percent).

· See notes under data availability. Please visit our website at www.globalindicators.org Also visit the web site of our research associate in France: Rexecode

The next release is scheduled for December 16, 2003 at 9:30 A.M. ET (3:30 P.M. CET)

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 November 14, 2003. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are change in stocks and ratio deflator of manufacturing value added to unit labor cost in manufacturing. Series in the coincident index that are based on The Conference Board estimates are real imports and paid employment.

Professional Contacts at The Conference Board:
Indicator Program: 1-212-339-0336

Media Contacts:
Randy Poe: 1-212-339-0234
Frank Tortorici: 1-212-339-0231
Sandra Lester: 32-2-675-5405

Email: indicators@conference-board.org
Website: http://www.globalindicators.org

THE CYCLICAL INDICATOR APPROACH. The composite indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading and coincident indexes are essentially composite averages of between four and ten individual leading or coincident indicators. (See page 3 for details.) They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component-primarily because they smooth out some of the volatility of individual components.

Historically, the cyclical turning points in the leading index have occurred before those in aggregate economic activity, while the cyclical turning points in the coincident index have occurred at about the same time as those in aggregate economic activity.

Further explanations of the cyclical indicator approach and the composite index methodology appear in The Conference Board's Business Cycle Indicators report and Web site:www.globalindicators.org.

France Composite Indexes: Components and Standardization Factors

	Leading Index	Factor
1.	Bond Yield, 10 year	.3229
2.	Yield Spread, 10 year minus Day-Day Loan	.1552
3.	Stock Price SBF 250 Index	.0196
4.	Personal Consumption of Manuf. Goods	.1083
5.	Building Permits, residential	.0234
6.	New Unemployment Claims	.0759
7.	Industrial New Orders	.0277
8.	Consumer Confidence Index	.0394
9.	Change in Stocks	.0096
10.	Ratio Deflator of Manuf. Value Added to Unit Labor Cost	.2180
	Coincident Index
1.	Retail sales	.0940
2.	Industrial Production	.0531
3.	Real Imports	.0532
4.	Paid Employment	.7997

Notes: The component factors are inversely related to the standard deviation of the month-to-month changes in each component. They are used to equalize the volatility of the contribution from each component and are "normalized" to sum to 1. Under normal circumstances, updates to the leading and coincident indexes only incorporate revisions to data over the past six months.

The factors above for the leading index were calculated using 1987-1999 as the sample period for measuring volatility. A separate set of factors for the 1983-1987 period, 1978-1982 period, 1976-1978 period, and 1970-1976 period is available upon request. The factors above for the coincident index were calculated using 1970-1999 as the sample period. When one or more components is missing, the other factors are adjusted proportionately to ensure that the total continues to sum to 1. For additional information on the standardization factors and the index methodology visit our Web site: www.globalindicators.org.

To address the problem of lags in available data, those leading and coincident indicators that are not available at the time of publication are estimated using statistical imputation. An autoregressive model is used to estimate each component. The resulting indexes are constructed using real and estimated data, and will be revised as the data unavailable at the time of publication become available. Such revisions are part of the monthly data revisions, now a regular part of the U.S. Business Cycle Indicators program. The main advantage of this procedure is to utilize in the leading index the data, such as stock prices, that are available sooner than other data on "real" aspects of the economy, such as new orders and changes in inventory. Empirical research by The Conference Board suggests there are real gains in adopting this procedure to make all the indicator series as up-to-date as possible.

NOTICES

The schedule for 2003 for the France "Leading Economic Indicators" news release is:

October 2003 data … Tuesday, December 16, 2003

All releases are at 9:30 A.M. ET (3:30 P. M. CET).

ABOUT THE CONFERENCE BOARD. Founded in 1916, The Conference Board is the premier business membership and research network. The Conference Board has become a global leader in helping executives build strong professional relationships, expand their business knowledge and find solutions to a wide range of business challenges. The Board's Economics Program, under the direction of Chief Economist Gail Fosler, is a recognized 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 Commerce. The Conference Board now produces business cycle indexes for the U.S., Australia, France, Germany, Korea, Japan, Mexico, Spain and the U.K. To subscribe to any of these indexes, please visit www.globalindicators.org , contact the Global Indicators Research Institute at 212-339-0330, or email indicators@conference-board.org.

AVAILABLE FROM THE CONFERENCE BOARD:

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(Includes monthly release, data, charts and commentary)
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(Sample available on request)
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BCI Handbook (published 2001) $ 20
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Business Cycle Indicators for France, Germany, Japan, Korea, Mexico, Spain and the U.K. are available at $500 per country per year (1 user). Discounts are available to Associates of The Conference Board and accredited academic institutions.