The Coincident Barometer records a slight decrease, and the Leading Barometer remains stable in October. Both show a stabilization movement after four consecutive months of increases. Mainly the results of the Western Hemisphere are holding back the barometer.
In October, the Global Economic Coincident Barometer decreases by 0.7 points to 97.8 points, while the Leading Barometer remains stable at 102.7 points. Among the regions, the Western Hemisphere contributes negatively to both results, while the Asia, Pacific & Africa region moves in the opposite direction and Europe shows moderate contributions in both directions.
“Following four consecutive increases in both the coincident and leading global barometers, neither increased further. In both cases, survey information from the United States in particular restrained further improvement. While political turmoil largely affected industry, the slight decline in the coincident indicator was largely due to services. Given that the US government shutdown is too recent to be reflected in the underlying data, this probably highlights an overall weakening of the Western Hemisphere that cannot be fully compensated for by the rest of the world”, comments KOF Director Jan-Egbert Sturm the latest results.
Coincident Barometer – regions and sectors
The 0.7-point decrease in the Coincident Barometer in October results from negative contributions of 0.9 and 0.1 points from the Western Hemisphere and Europe regions, respectively, while the Asia, Pacific & Africa region contributes positively with 0.3 points. As a result, the Western Hemisphere indicator falls to its lowest level since July of this year, diverging from the levels of the other regions. These, in turn, stabilize near the neutral 100-point level.
Among the coincident sectoral indicators, only Trade rises in the month, maintaining the highest level among sectors, a position it has held since March of this year. Among the other sectors, Services records the largest decrease and the lowest level.
Leading Barometer – regions and sectors
The Global Leading Barometer remains stable in October, with the Asia, Pacific & Africa and Europe regions contributing positively with 0.6 and 0.1 points, respectively. The Western Hemisphere, on the other hand, contributes negatively with -0.7 points. The first two regional indicators remain above the 100-point level, while the Western Hemisphere falls to the upper range of the 90-point level. The Leading Global Barometer leads the world economic growth rate cycle by three to six months on average.
The leading sectoral indicators show mixed results in the month, with increases in Trade, Construction, and Industry, and decreases in Services and the Economy indicator (which is based on variables representing overall business and consumer evaluations).