Euro area LEI falls in April by 0.7% to 98.5: The Conference Board

As a result, the LEI contracted by 4.2 per cent over the six-month period from October 2023 to April 2024, a smaller pace of decline than the 5.1-per cent contraction over April-October last year.

The US think tank’s coincident economic index (CEI) for the zone remained flat in April at 108.5, after a slight increase of 0.2 per cent in March. The CEI grew by 0.4 per cent between October 2023 and April 2024, after increasing by 0.3 per cent over the previous six-month period.

The LEI provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, whereas the CEI provides an indication of the current state of the economy.

“A large negative contribution from the yield spread, in conjunction with weak manufacturing new orders, consumer expectations and order books volume weighed heavily on the index. Overall, the LEI remains depressed, both on a six-month and annual basis, and continues to point to recession risks going forward. However, forthcoming policy rate cuts by the European Central Bank are expected to alleviate these growth headwinds in the second half of 2024,” said Ian Hu, economic research associate at the think tank, in a release.

Fibre2Fashion News Desk (DS)