The Conference Board Inc.
09/16/2024 | Press release | Distributed by Public on 09/16/2024 09:18
LEI for Mexico Inched up
For Release 11:00 AM ET, September 16, 2024
Using the Composite Indexes: The Leading Economic Index (LEI) 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 (CEI) provides an indication of the current state of the economy. Additional details are below.
The Conference Board Leading Economic Index®(LEI) for Mexico increased by 0.1 percent in July 2024 to 117.1 (2016=100), after a sharp decline of 2.1 percent in June. Over the six-month period between January and July 2024, the LEI declined by 4.0 percent, after declining by 2.0 percent over the previous six-month period between July 2023 and January 2024.
The Conference Board Coincident Economic Index® (CEI) for Mexico continued to increase slightly by 0.2 percent in July 2024 to 117.6 (2016=100), after increasing by 0.1 percent in June. Overall, the CEI increased by 0.7 percent over the six-month period between January and July 2024, after increasing by 0.4 percent over the previous six-month period.
"The Mexico LEI inched up in July, after five consecutive months of decline," said Malala Lin, Economic Research Associate, at The Conference Board. "The slight increase reflects improvements in construction industrial production, the exchange rate, the price of oil, and stock prices. However, both the semi-annual and annual growth rates of the LEI remain deeply in the negative territory, signaling recession risks. Additionally, Mexico's senate just passed a controversial judicial reform package that left foreign investors wary, including the impact of the reform on the US-Mexico-Canada Agreement on trade. The resulting shaky investor confidence may weigh on the economic expansion going forward. Taking into account the softer-than-expected first half of the year, The Conference Board expects Mexico's GDP growth to slow to 1.6 percent in 2024 from 3.2 percent in 2023."
The next release is scheduled for Friday, October 18, 2024, at 11 A.M. ET.
The Mexico LEI ticked up in July
Improvements in four out of the six components drove the LEI's minimal gain in July
The six-month growth rate of the LEI fell deeper into the negative territory, signaling recession risks
NOTE: The chart illustrates the so-called 3Ds-duration, depth, and diffusion-for interpreting a downward movement in the LEI. Duration refers to how long the decline has lasted. Depth denotes the size of decline. Duration and depth are measured by the rate of change of the index over the most recent six months. Diffusion is a measure of how widespread the decline is among the LEI's component indicators-on a scale of 0 to 100, a diffusion index reading below 50 indicates most components are weakening.
The 3Ds rule signals an impending recession when: 1) the six-month diffusion index lies below 50, shown by the black warning signal lines in the chart; and 2) the LEI's six-month rate of decline falls below the threshold of −4.9 percent. The red recession signal lines indicate months when both criteria are met simultaneously-and thus that a recession is likely imminent or underway.
About The Conference Board Leading Economic Index®(LEI) and Coincident Economic Index® (CEI) for Mexico
The composite economic indexes are key elements in an analytic system designed to signal peaks and troughs in the business cycle. Comprised of multiple independent indicators, 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 reflects current economic conditions and is highly correlated with real GDP. The LEI is a predictive tool that anticipates-or "leads"-turning points in the business cycle by around five months.
The six components of the Leading Economic Index® for Mexico are:
- Industrial Production (Construction)
- Stock Prices
- U.S. Refiners' Acquisition Cost of Domestic and Imported Crude Oil
- Manufacturing Inventories (Opinion Balance)
- Federal Funds Rate
- Real Exchange Rate
The three components of the Coincident Economic Index® for Mexico are:
- Industrial Production
- Retail Sales
- Employment, IMSS Beneficiaries
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