Global Leading Indicators

About the Leading Economic Index and the Coincident Economic Index:

The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The Coincident Economic Index provides an indication of the current state of the economy. Additional details are below.

New York, February 14, 2024…The Conference Board Leading Economic Index^® (LEI) for the United Kingdom declined slightly by 0.1 percent in December 2023 to 76.1 (2016=100), following a 0.3 percent decrease in November. The LEI for the UK contracted by 2.9 percent in the second half of 2023, a slower rate of decline than the 4.4 percent contraction in the first half of the same year.  

 The Conference Board Coincident Economic Index^® (CEI) for the United Kingdom also declined slightly by 0.1 percent in December 2023 to 104.4 (2016=100), partially reversing an improvement of 0.2 percent in November. The CEI for the UK rose by only 0.1 percent in the in the second half of 2023, a slower pace than the 0.8 percent growth in the first half of 2023.  

“The UK LEI continued to decline in December as most components of the index remained weak” said Allen Li, Associate Economist at The Conference Board. “However, while the LEI is still on a downward trend, the pace of declines eased in recent months. This suggests that headwinds to economic growth in the United Kingdom may moderate going forward. The Conference Board currently projects that annual real GDP growth will pick up slightly in 2024, to 0.4 percent.”

The UK LEI declined further in December

Most components of the UK LEI remain depressed 

Note: Due to lagging data, a statistical imputation was applied to forecast data from June-December 2023 for Productivity. Actual data will be incorporated as soon as data is available from the UK Office of National Statistics.

The growth rate of the UK LEI remains below its long-term trend, still pointing to recession risks 

Note: The chart illustrates the so-called 3D’s rule which is a reliable rule of thumb to interpret the duration, depth, and diffusion – the 3D’s – of a downward movement in the LEI. Duration refers to how long-lasting a decline in the index is, and depth denotes how large the decline is. Duration and depth are measured by the rate of change of the index over the last six months. Diffusion is a measure of how widespread the decline is (i.e., the diffusion index of the LEI ranges from 0 to 100 and numbers below 50 indicate most of the components are weakening). The 3D’s rule provides signals of impending recessions 1) when the diffusion index falls below the threshold of 50 (denoted by the black dotted line in the chart), and simultaneously 2) when the decline in the index over the most recent six months falls below the threshold of -3.5 percent. The red dotted line is drawn at the threshold value (measured by the median, -3.5 percent) on the months when both criteria are met simultaneously. Thus, the red dots signal a recession.

About The Conference Board Leading Economic Index^® (LEI) for The United Kingdom

The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The indexes are constructed to summarize and reveal common turning points in the economy in a clearer and more convincing manner than any individual component. The CEI is highly correlated with real GDP. The LEI is a predictive variable that anticipates (or “leads”) turning points in the business cycle by 11 months. Shaded areas denote recession periods or economic contractions. The dates above the shaded areas show the chronology of peaks and troughs in the business cycle.

The eight components of The Conference Board Leading Economic Index^® for The United Kingdom include: Unemployment Claimant Counts, Weekly Working Hours, General Economic Situation, Stock Prices, Yield Spread, Productivity, Total Gross Operating Surplus of Corporations, Housing Sales Expectation.

To access data, please visit: https://data-central.conference-board.org/

About The Conference Board

The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead™. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org