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FOR RELEASE: 11:00 A.M. ET, FRIDAY, JUNE 18, 2004


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The Conference Board announced today that the leading index for Mexico decreased 0.3 percent and the coincident index increased 0.3 percent in April.

  • The leading index fell slightly in April following six consecutive gains, with the real exchange rate and stock prices being the major contributors to this month's weakness. The growth rate of the leading index has been fluctuating around a 3.5 percent average annual rate since September 2003, and growth has continued to be strong and widespread so far this year. The coincident index increased again in April, keeping it on a flat to slightly rising trend.
  • Consistent with the improving growth rate of the leading index, real GDP growth picked up to a 5.9 percent average annual rate over the last two quarters (although GDP growth continues to be volatile from quarter to quarter). The continued upward trend in the leading index suggests that the recent rate of economic growth is likely to persist in the near term.

LEADING INDICATORS. Three of the six components that make up the leading index increased in April. The positive contributors to the index—from the largest positive contributor to the smallest one—are net insufficient inventories, US refiners acquisition cost of domestic and imported crude oil, and the (inverted) federal funds rate. The (inverted) real exchange rate, stock prices, and the industrial production construction component* declined in April.

With the 0.3 percent decrease in April, the leading index now stands at 108.1 (1990=100). Based on revised data, this index increased 0.3 percent in March and increased 0.4 percent in February. During the six-month span through April, the index increased 1.8 percent, with five of the six components increasing (diffusion index, six-month span equals 83.3 percent).

COINCIDENT INDICATORS. All four components that make up the coincident index increased in April. The positive contributors were industrial production, the (inverted) unemployment rate, the number of people employed (measured by IMSS beneficiaries), and retail sales*.

With the 0.3 percent increase in April, the coincident index now stands at 113.7 (1990=100). Based on revised data, this index increased 0.3 percent in March and held steady in February. During the six-month span through April, the index increased 0.5 percent, with three of the four components increasing (diffusion index, six-month span equals 50.0 percent).

The next release is scheduled for July 16, 2004 at 11:00 A.M. (ET) In Mexico –July 16, 2004 at 10:00 A.M. (MEX)

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available “as of” 10 A.M. June 17, 2004. Some series are estimated as noted below.

NOTES: Series in the leading index based on The Conference Board estimates include industrial production - construction component. The series in the coincident index based on The Conference Board estimates include retail sales.

Professional Contacts at The Conference Board:
Indicator Program: 1-212-339-0330

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.

Further explanations of the cyclical indicator approach and the composite index methodology appear in The Conference Board's Business Cycle Indicators report and Web

Mexico Composite Indexes: Components and Standardization Factors
 Leading IndexFactor
1.Industrial Production, Construction Component.0262
2.Stock Prices.0168
3.U.S. Refiners' Acquisition Cost of Domestic and Imported Crude Oil.0272
4.Net Insufficient Inventories.1255
5.Federal Funds Rate.0289
6.Real Exchange Rate.7754
Coincident Index
1.Industrial Production.1086
2.Retail Sales.0504
4.Unemployment Rate.6747

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 were calculated using 1985-1999 as the sample period for measuring volatility for the leading index, and 1986-1999 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.


April 2004 Data ... Friday, June 18, 2004

All releases are at 11:00 AM (ET) and 10:00 AM (MEX).

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, Spain Mexico and the U.K. To subscribe to any of these indexes, please visit, contact the Global Indicators Research Institute at 212-339-0330, or email

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