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This month's release incorporates benchmark revisions in the Germany Leading Index, which brings it up-to-date with revisions in its component data. Three components of the leading index underwent significant benchmark revisions by the source agency. These components are new orders for investment goods industries, new residential construction orders, and six-month smoothed growth rate of CPI for services. (Due to these revisions, month-to-month changes in the leading index are no longer comparable to those issued prior to this benchmark.) The coincident index has not been affected by these revisions.

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The Conference Board announced today that the leading index for Germany decreased 0.4 percent and the coincident index decreased 0.3 percent in March.

  • The leading index declined 0.4 percent in March following a steep 0.8 percent drop in February. March marks the fourth consecutive decrease in the index, which may be signaling that recent declines in GDP will persist over the next few quarters.
  • The coincident index, a measure of current economic conditions, continues its downward trend established after July 2002 and is strongly reflective of the sluggish to negative economic growth that Germany has experienced since last year.

LEADING INDICATORS. Five of the eight components in the leading index decreased in March. The negative contributors to the leading index - in order from the largest negative contributor to the smallest - are new residential construction orders, stock prices, consumer confidence, new orders in investment goods industries and gross enterprises and properties income. Three of the eight components in the leading index increased in March. The positive contributors to the leading index -in order from the largest to the smallest positive contributor- are the yield spread, inventory change series and the growth rate of CPI for services.

The leading index now stands at 99.6 (1990=100). Based on revised data, this index decreased 0.8 percent in February and 0.1 percent in January. During the six-month span through March, the leading index decreased 1.7 percent, with five of the eight components decreasing (diffusion index, six-month span equals 43.8 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index decreased in March. The negative contributors to the coincident index - in order from the larger negative contributor to the smaller- are employment and retail trade sales. The positive contributors to the coincident index -in order from the larger positive contributor to the smaller- are industrial production and manufacturing sales.

With a decrease of 0.3 percent in March, the coincident index now stands at 110.1 (1990=100). Based on revised data, this index decreased 0.1 percent in February and was flat in January. During the six-month period through March, the coincident index decreased 1.2 percent, with three of its four components decreasing (diffusion index, six-month span equals 12.5 percent).

The next release is scheduled for June 24, 2003 at 9:30 A.M. (ET)
In Germany -June 24, 2003 at 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" 9 A.M. ET on May 20, 2003. Some series are estimated as noted below.

NOTES: Series in the composite indexes for Germany that are based on The Conference Board estimates are inventory change, new residential construction orders, gross enterprises and properties income and manufacturing sales.

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Professional Contacts at The Conference Board:
Ataman Ozyildirim: 1-212-339-0399
Bart Van Ark: 31-50-363-3674

Media Contacts:
Randy Poe: 1-212-339-0234
Frank Tortorici: 1-212-339-0231


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 nine 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.

Germany Composite Indexes: Components and Standardization Factors
 Leading IndexFactor
1.New Orders, Investment Goods.0845
2.Yield Spread, 10 year minus 3 month.3295
3.Change in Inventories.1250
4.Gross Enterprise and Property Income.0761
5.Stock Prices.0321
6.New Orders, Residential Construction.0556
7.Growth Rate for Consumer Price Index for Services.1918
8.Consumer Confidence Index.1055
Coincident Index
1.Manufacturing Sales.0591
2.Industrial Production.1018
3.Retail sales.0963

Notes: The standardization 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. These factors are revised effective with the May 22, 2003 release, and all historical values for the two composite indexes have been revised to reflect these changes. (Under normal circumstances, updates to the leading and coincident indexes only incorporate revisions to data over the past six months.)

The factors above were calculated using 1992-2000 as the sample period for measuring volatility for the leading index, and 1991-2000 as the sample period for the coincident index. There are additional sample periods as the result of different starting dates for the component data. 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:

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.


Release Schedule:

Tuesday, June 24, 2003..... April 2003 Data

Notes: With annual benchmark revisions in June 2002, all components of the leading and coincident indexes were updated with all revisions in the underlying component data.

For detailed information on benchmark revisions, visit our website:

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 or contact the Global Indicators Research Institute at 212-339-0330 or email


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