Spain's Conference Board LEI Increases

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The Conference Board LEI for Spain increased again in August, with large positive contributions from the order books survey and the long-term government yield (inverted) offsetting the large negative contribution from stock prices. Between February and August of this year, the leading economic index edged up by 0.1 percent (about a 0.2 percent annual rate), much slower than its growth of 2.3 percent (about a 4.6 percent annual rate) over the previous six months. Meanwhile, the strengths and weaknesses among the leading indicators have become balanced over the past six months.

The Conference Board CEI for Spain, a measure of current economic activity, also increased in August. In the six-month period ending August 2015, the coincident economic index grew by 2.1 percent (about a 4.2 percent annual rate), up from 1.5 percent (about a 3.0 percent annual rate) over the previous six months. The strengths among the coincident components have remained very widespread. Meanwhile, real GDP was about 4.1 percent (annual rate) in the second quarter, after advancing by 3.8 percent (annual rate) in the first quarter.

The LEI for Spain has increased over the last two months. However, its six-month growth rate has moderated considerably over the past six months. Meanwhile, the CEI continues to increase at a modest pace, and its six-month growth rate has improved. Taken together, the recent behavior of the composite indexes suggests that the current economic expansion should continue into next year, but the pace may moderate somewhat.