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FOR RELEASE: 9:00 A.M. ET, THURSDAY, JUNE 19, 2003

SPAIN COMPOSITE INDEXES FOR APRIL 2003

The Press Release in a PDF file
English Version     Spanish Version


As announced last month, this month's release incorporates benchmark revisions to the composite indexes for Spain. The benchmark revisions bring the composite indexes up-to-date with revisions in component data and are maintenance procedures typically done once a year. In addition, because two components of the leading index were discontinued in December 2002, the capital equipment component of industrial production (IP) was benchmarked and the construction component of IP is no longer used in calculating the leading index. Components of the coincident index remain the same. The effects of these revisions on the indexes are very small, as expected. (Due to these revisions, month-to-month changes in the composite indexes will no longer be comparable to those issued prior to this benchmark.) For more information, visit our web site at www.globalindicators.org.

The Conference Board announced today that both the leading and coincident indexes for Spain increased 0.4 percent in April.

  • The leading index in Spain increased in April after declining in March. Increases in stock prices, orders and capital equipment production contributed to this month's gain in the leading index.
  • Despite slight weakness earlier this year, the leading index continues its upward trend since early 2002. Both the one-month and six-month diffusion indexes show that strength among the leading components remains widespread.
  • The coincident index, an important measure of current economic activity, continued to increase through April. The six-month diffusion index has been well above 50 percent in the last eleven months.

LEADING INDICATORS. Three of the six components that make up the leading index increased in April. The positive contributors-in order from the largest positive contributor to the smallest-are the order books survey, the Spanish equity price index, and the capital equipment component of industrial production. Three of the six components decreased in April. The negative contributors-in order from the largest negative contributor to the smallest-are job placings, the inverted long-term government bond yield, and the Spanish contribution to Euro M2.

With the increase of 0.4 percent in April, the leading index now stands at 130.5 (1990=100). Based on revised data, this index decreased 0.4 percent in March and increased 0.6 percent in February. During the six-month span through April, the index increased 1.1 percent, and three of the six components advanced (diffusion index, six-month span equals 50 percent).

*See notes under data availability.

The next release is scheduled for July 17, 2003 at 9:00 A.M. (ET)
In Spain -July 17, 2003 at 3:00 P.M. (CET)

COINCIDENT INDICATORS. All four components that make up the coincident index increased in April. The positive contributors -in order from the largest positive contributor to the smallest-include the retail sales survey, final household consumption*, real imports*, and industrial production excluding construction*.

With the increase of 0.4 percent in April, the coincident index now stands at 139.4 (1990=100). Based on revised data, this index increased 0.1 percent in March and increased 0.4 percent in February. During the six-month span through April, the index increased 1.1 percent, and three of the four components advanced (diffusion index, six-month span equals 87.5 percent).

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. (ET) June 17, 2003. Some series are estimated as noted below.

* Series in the coincident index based on The Conference Board estimates include final household consumption, industrial production excluding construction, and real imports. There is no series that was based on The Conference Board estimates in the leading index.

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

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

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.

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:

May 2003 Data............... Thursday July 17, 2003
June 2003 Data............... Tuesday August 19, 2003
July 2003 Data............... Thursday September 18, 2003

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 $ 25 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.