The Conference Board Leading Economic Index® (LEI) for Mexico increased 0.1 percent and The Conference Board Coincident Economic Index® (CEI) increased 0.3 percent in June.

The Conference Board LEI for Mexico increased slightly in June, following a decline last month. Large gains in net insufficient inventories and stock prices more than offset negative contributions from oil prices and the (inverted) real exchange rate. Despite the small gain this month, the six-month increase in the leading economic index continued to moderate - to 1.8 percent (about a 3.6 percent annual rate) in the first half of 2011, from 3.4 percent (about a 6.9 percent annual rate) in the second half of last year. Nevertheless, the strengths among the leading indicators were more widespread than the weaknesses during the last six months.

The Conference Board CEI for Mexico also increased in June. With this month’s gain, the six-month growth rate in the coincident economic index stands at 2.1 percent (about a 4.3 percent annual rate) during the first half of 2011, up from the 1.4 percent rate (about a 2.9 percent annual rate) for the previous six months. Moreover, the strengths among the coincident indicators have remained very widespread, with all components increasing in recent months. Meanwhile, real GDP expanded at a 4.5 percent annual rate in the second quarter of 2011, up from growth of a 2.4 percent annual rate in the first quarter.

The Conference Board LEI for Mexico increased in June, but its six-month growth rate continued to slow through June compared to the second half of last year. Meanwhile, The Conference Board CEI for Mexico continued its general upward trend that started in mid-2009, and its growth has picked up somewhat in the last six months. Taken together, the behavior of the composite indexes suggests that economic activity will continue to expand, albeit at a moderate pace in the near term.

LEADING INDICATORS

Two of the six components that make up The Conference Board LEI for Mexico increased in June. The positive contributors to the index are net insufficient inventories and stock prices. The US refiners’ acquisition cost of domestic and imported crude oil, the (inverted) real exchange rate, and the industrial production construction component decreased in June. The (inverted) federal funds rate remained unchanged.

With the 0.1 percent in June, The Conference Board LEI for Mexico now stands at 120.7 (2004=100). Based on revised data, this index declined 0.4 percent in May and increased 0.7 percent in April. During the six-month span through June, the index increased 1.8 percent, with four of the six components increasing (diffusion index, six-month span equals 75.0 percent).

COINCIDENT INDICATORS

All three components that make up The Conference Board CEI for Mexico increased in June. The positive contributors - from the largest positive contributor to the smallest one - are retail sales, number of people employed (measured by IMSS beneficiaries) and industrial production.

With the increase of 0.3 percent in June, The Conference Board CEI for Mexico now stands at 115.4 (2004=100). Based on revised data, this index increased 0.3 percent in May and remained unchanged in April. During the six-month span through June, the index increased 2.1 percent, with all three components increasing (diffusion index, six-month span equals 100.0 percent).