The Conference Board Leading Economic Index® (LEI) for China increased 0.9 percent in July to 331.2 (2004 = 100), following a 0.6 percent increase in June and a 1.1 percent increase in May. Total loans issued by financial institutions made the largest positive contribution to the index, followed by the 5000 industry enterprises diffusion index: raw materials supply index, and total floor space started. The consumer expectations index, The PMI new export orders index, and the (inverted) PMI supplier delivery index declined in July.
"July's gain in the Leading Economic Index for China was driven mainly by bank loans, while consumer sentiment, manufacturing, and exports were all weak," said Jing Sima, senior economist at The Conference Board. "Despite the gain, the increased volatility in the LEI, lack of strength in the real economy, and recent turmoil in China's stock and currency markets suggest that China's economy will be facing increasing downside risks in the months ahead."
The Conference Board Coincident Economic Index® (CEI) for China, which measures current economic activity, increased 1.1 percent in July to 278.4 (2004 = 100), following a 0.2 percent increase in June and a 0.6 percent increase in May. Four of the five components contributed positively to the index in July.
The Conference Board LEI for China aggregates six economic indicators that measure economic activity in China. Each of the LEI components has proven accurate on its own. Aggregating individual indicators into a composite index filters out so-called "noise" to show underlying trends more clearly.
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