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FOR RELEASE: 9:00 A.M. ET, TUESDAY, JULY 16, 2002

SPAIN COMPOSITE INDEXES FOR MAY 2002

The Press Release in a PDF file
English Version     Spanish Version

The Conference Board announced today that the leading index for Spain increased 0.9 percent and the coincident index increased 0.1 percent in May.

  • The leading index continued to grow in May. Despite the further decline in the stock market, a significant gain in the industrial orders as well as the capital equipment component of industrial production contributed to this month's gain in the leading index.
  • However, the leaving index is still 0.3 percent below its May 2001 level, and is 1.1 percent below its most recent peak reached in January 2001.
  • The coincident index gained moderately in May. Retail sales declined this month, after a sharp increase in April. Although the coincident index is now 1.1 percent above its May 2001 level, the pace of its growth is slower than it was in 2001.

LEADING INDICATORS. Three of the seven components that make up the leading index increased in May. The positive contributors-in order from the largest positive contributor to the smallest- include the order books survey, the Spanish contribution to Euro M2, and the capital equipment component of industrial production. Two of the seven components of the leading index decreased in May. The negative contributors to the index occurred in the Spanish equity price index and the construction component of industrial production. Inverted long-term government bond yield and job placings held steady in May.

With the increase of 0.9 percent in May, the leading index now stands at 149.2 (1990=100). Based on revised data, this index increased 0.5 percent in April and decreased 0.9 percent in March. During the six-month span through May, the index decreased 0.9 percent, and two of the seven components advanced (diffusion index, six-month span equals 35.7 percent).

COINCIDENT INDICATORS. Two of the four components that make up the coincident index increased in May. The positive contributors include final household consumption* and real imports*. The retail sales survey declined while industrial production excluding construction held steady in May.

With the increase of 0.1 percent in May, the coincident index now stands at 135.0 (1990=100). Based on revised data, this index increased 0.3 percent in April and increased 0.3 percent again in March. During the six-month span through May, the index increased 0.8 percent, and three of the four components advanced (diffusion index, six-month span equals 75.0 percent).

*See notes under data availability.

The next release is scheduled for August 15, 2002 at 9:00 A.M. (ET)
In Spain - August 15, 2002 at 3:00 P.M. (CET)

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 6 P.M. (ET) July 14, 2002. Some series are estimated as noted below.

NOTES: There was no series in the leading index based on The Conference Board estimates. Series in the coincident index based on The Conference Board estimates include final household consumption and real imports.

# # #

Professional Contacts at The Conference Board:
Ataman Ozyildirim: 1-212-339-0399
Mike Fort: 1-212-339-0402

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

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 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.

A change in direction in a composite index does not signal a cyclical turning point unless the movement is of significant size, duration, and scope. Historical analysis with U.S. data shows recession warnings are best determined by looking for negative growth of about 3.5 percent, coupled with declines in at least half of the components over a six-month span. 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.

Spain Composite Indexes: Components and Standardization Factors
 Leading IndexFactor
1.Construction Component of Industrial Production.1946
2.Capital Equipment Component of Industrial Production.0381
3.Contribution to Euro M2.3814
4.Stock Price Index.0387
5.Long term Government Bond Yield.0660
6.Order Books Survey.1842
7.Job Placings.1004

Coincident Index
1.Final Household Consumption.6215
2.Industrial Production, Excluding Construction.2477
3.Retail Sales Survey.0611
4.Real Imports.0697

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 1984-2000 as the sample period for measuring volatility for the leading index and 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: 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 2002 schedule for the Spain "Leading Economic Indicators" news release is:

June 2002 Data............... Thursday August 15, 2002

All releases are at 9:00 A.M (ET), 3:00 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

Spain Business Cycle Indicators Internet Subscription $ 500 per year (1 user)
(Includes monthly release, data, charts and commentary)
Individual Data Series $ 15 per series downloaded
Monthly BCI Report $ 130 per year
(Sample available on request)
Monthly News Release (fax or email) $ 45 per year
BCI Handbook (published 2001) $ 20
Corporate Site License $2,600 per year

Business Cycle Indicators for Australia, 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.