Page 9 - Ekonomija i Biznis_May 2016.indd

The leading composite index predicts Leading composite index
the economic activity on the basis of
combination of indicators that are ECONOMIC DECELERATION IN
considered predecessors of the economic THE SECOND HALF OF 2015?
activity with a prognosis period of
approximately six months in advance.
Some indicators combined with this
index include the following: number of
unemployed people who are registered for a
remuneration, issued construction permits,
index of new orders in the manufacturing
industry, credits placed of enterprises,
import of machines and equipment etc.

Leading composite index

After a period of surprisingly high growth,
the leading composite index for the first
time showed serious signs of weakness in
January 2016, after at least 16 months of
annual growth of more than 8 index points.
In January 2016, the annual growth reduced
to 6.2 index points, while the monthly
dynamics is negative, -5.2 index points, only
partially reflecting seasonal fluctuations.
The political crisis for the first time
reflected on the leading index and suggests
that serious deceleration of the economic
activity can be expected in the second half
of 2016.

Diffuse index of future economic activity

The diffuse index of the future economic
activity is an indicator of the share of the
composite index components for the future
economic activity, which increased during
the month. According to this index, in
January 2016, only 22% of the components
of the leading index increased, which
corresponds to the movements of the
composite index. Namely, non-declining
movements were observed only in the stock
index and the interest rate range, reflecting
severe “narrowing” of the private sector
which will be effective in the second half of
this year.

Source: by order of Economy and Business.
www.financethink.mk

May 2016 9