Euro area LEI increases

Jean-Claude Manini, The Conference Board Senior Economist for Europe: " July's pickup of the LEI for the Euro Area is mostly driven by the contribution of the interest rate spread and real money supply, just as in the United States during the same month. But the overall increase in the LEI was too small to counterbalance the loss of momentum in the leading indicators in the first half of 2011. A continued modest expansion of economic activity remains the most likely scenario for the second half of the year. However, tighter financial conditions and a new round of budget cuts significantly increase the downside risks. As policy options to support growth are shrinking, the main challenge will be to avoid policy mistakes."

The Conference Board Coincident Economic Index® (CEI) for the Euro Area, which measures current economic activity, increased 0.1 percent in July. The index stands at 102.8 (2004 = 100) according to preliminary estimates*. The CEI decreased 0.3 percent in June after remaining unchanged in May.

About The Conference Board Leading Economic Index®(LEI) for the Euro Area

The Conference Board Leading Economic Index® for the Euro Area was launched in January 2009. Plotted back to 1987, this index has successfully signaled turning points in the business cycle of the bloc of countries that now constitute the Euro Area, defined by the common currency zone.

The Conference Board currently produces leading economic indexes for ten other individual countries, including Australia, China, France, Germany, Japan, Korea, Mexico, Spain, the U.K. and the U.S.

The eight components of The Conference Board Leading Economic Index® for the Euro Area include:

Economic Sentiment Index (source: European Commission DG-ECFIN)

Index of Residential Building Permits Granted (source: Eurostat)

Index of Capital Goods New Orders (source: Eurostat)

EURO STOXX® Index (source: STOXX Limited)

Money Supply (M2) (source: European Central Bank)

Interest Rate Spread (source: ECB)

Eurozone Manufacturing Purchasing Managers' Index (source: Markit Economics)

Eurozone Service Sector Future Business Activity Expectations Index (source: Markit Economics)

To view The Conference Board calendar of 2011 indicator releases:

http://www.conference-board.org/data/

* Series in The Conference Board LEI for the Euro Area that are based on The Conference Board estimates are real money supply, residential building permits, and new orders of capital goods. All series in The Conference Board CEI for the Euro Area are based on The Conference Board estimates (employment, industrial production, retail trade, and manufacturing turnover).

About The Conference Board

The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.

The next release is scheduled for Monday, September 26, 2011 at 10:00 A.M. (Brussels Time); 4:00 A.M. (ET).