The Global Barometers decline in February after seven consecutive months of increases. The Coincident Barometer remains below average, while the Leading Barometer remains above average. This decline is a warning that the recovery process is fragile.
In February, the Coincident Global Economic Barometer falls by 1.6 points and the Leading Barometer by 6.0 points to 92.4 and 105.5 points, respectively. In both cases, the Asia, Pacific & Africa region is the largest contributor to the decline, with the other regions contributing more discreetly in different directions. The gap between the two indicators has narrowed this month, but remains high at 13.1 points.
“This month the barometers report a clear bump in the road to recovery. As this setback is almost entirely driven by data from the Asian region, and is most visible in construction-related data, it is likely that the direct and indirect consequences of the problems in China’s housing sector are at least part of the story. However, with the overall leading indicator still well above both its long-term average and the overall coincident indicator, the overall picture remains one of a recovering global economy”, evaluates KOF director Jan-Egbert Sturm the latest results.
Coincident Barometer – regions and sectors
The decline in the Coincident Barometer in February is mainly driven by the indicator for the Asia, Pacific & Africa region, with a negative contribution of -1.6 points, as the contributions from Europe and the Western Hemisphere of -0.2 and +0.2 points, respectively, offset each other this month. The regional coincident indicators continue to hover above the 90 mark, pointing to a modest recovery in world economic activity.
Among the Coincident sector indicators, all declined in February, particularly Construction, which returned to the 80-point range, and recorded the lowest level among the indicators.
Leading Barometer – regions and sectors
The Leading Global Barometer leads the world economic growth rate cycle by an average of three to six months. In February, the largest negative contribution comes from the Asia, Pacific & Africa region, with -6.1 points. The Western Hemisphere makes a modest contribution of -0.2 points, while Europe moves in the opposite direction, adding 0.3 points to the final indicator. The indicator for the Asia, Pacific & Africa region reflects a revision of the positive outlook recorded in the previous month, while the expectations for Europe and the Western Hemisphere remain side-by-side at a level that is still favorable.
In February, all the Leading sector indicators declined, with Economy (aggregated business and consumer evaluations) being the only one to register a level below 100 points.
