World Economy Indicators

23 June 2003

• In the US, the index of leading economic indicators compiled by New York’s Conference Board climbed 1% in May.

The increase – the largest since December 2001 – is well ahead of analysts’ expectations and follows a rise of 0.1% in April and a fall of 0.2% in March. Eight out of the index’s ten components posted a gain.

The index is a guide to economic conditions in three to six months’ time. Board economist Ken Goldstein declared that the May rise “finally points to a recovery, almost a year and a half after the end of the recession. But the dangers present in the first five months of the year have not disappeared completely.”

• British retail sales, on the other hand, fell 0.1% last month compared with April, underlining the slowdown in consumer spending. The figures from the Office for National Statistics surprised analysts, who had been expecting a rise.

In the three months to May, retail sales were up 3.4% year-on-year – the slowest increase of this type since July 1999.

Meanwhile, the Confederation of British Industry warned that the manufacturing sector remains weak. In the group’s latest study, 39% of respondents said orders were below normal, compared with 12% recording above-average conditions.

• Japan is also showing no signs of recovery. The Ministry of Economy, Trade and Industry’s index of business activity fell 0.5% in April from the previous month.

Data sourced from: multiple sources; additional content by WARC staff