The Conference Board announced today that the leading index for Mexico increased 0.6 percent and the coincident index decreased 0.3 percent in January.

• The leading index continued increasing in January, and has now increased at about a 3.5 percent annual rate from its most recent low in September 2003 (and by almost 2 percent over the last year). The growth in the leading index in recent months also has been widespread. The coincident index declined moderately in January, and it has been fluctuating around a flat trend since early 2002.
• Real GDP has been extremely volatile from quarter to quarter, but the trend growth rate has been improving steadily - from a -1.0 percent average rate in the second half of 2002 to 1.2 percent in the first half of 2003 and 2.8 percent in the second half. The more rapid growth of the leading index in recent months suggests some further improvement in the rate of economic growth during the first half of 2004.

LEADING INDICATORS. Five of the six components that make up the leading index increased in December. The positive contributors to the index-from the largest positive contributor to the smallest one-are US refiners acquisition cost of domestic and imported crude oil, stock prices, the (inverted) real exchange rate, net insufficient inventories, and the (inverted) federal funds rate. The industrial production construction component* declined in January.

With the 0.6 percent increase in January, the leading index now stands at 107.2 (1990=100). Based on revised data, this index increased 0.1 percent in December and increased 0.3 percent in November. During the six-month span through January, the index increased 0.8 percent, with four of the six components increasing (diffusion index, six-month span equals 66.7 percent).

COINCIDENT INDICATORS. Only one of the four components that make up the coincident index increased in January. The positive contributor was retail sales*. Industrial production, the (inverted) unemployment rate and the number of people employed (measured by IMSS beneficiaries) declined in January.

With the 0.3 percent decrease in January, the coincident index now stands at 113.1 (1990=100). Based on revised data, this index increased 0.2 percent in December and increased 0.1 percent in November. During the six-month span through January, the index decreased 0.2 percent, with two of the four components increasing (diffusion index, six-month span equals 50.0 percent).

The next release is scheduled for April 16, 2004 at 11:00 A.M. (ET) In Mexico - April 16, 2004 at 10:00 A.M. (MEX)

DATA AVAILABILITY. The data series used to compute the two composite indexes reported in the tables in this release are those available "as of" 10 A.M. March 18, 2004. Some series are estimated as noted below.

NOTES: Series in the leading index based on The Conference Board estimates include industrial production - construction component. The series in the coincident index based on The Conference Board estimates include industrial production and retail sales.

Professional Contacts at The Conference Board:
Indicator Program: 1-212-339-0336

Media Contacts:
Randy Poe: 1-212-339-0234
Frank Tortorici: 1-212-339-0231

Website: http://www.globalindicators.org

THE CYCLICAL INDICATOR APPROACH. The composite indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The leading and coincident indexes are essentially composite averages of between four and nine individual leading or coincident indicators. (See page 3 for details.) They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component-primarily because they smooth out some of the volatility of individual components.

Historically, the cyclical turning points in the leading index have occurred before those in aggregate economic activity, while the cyclical turning points in the coincident index have occurred at about the same time as those in aggregate economic activity.

Further explanations of the cyclical indicator approach and the composite index methodology appear in The Conference Board's Business Cycle Indicators report and Web site:www.globalindicators.org.

Mexico Composite Indexes: Components and Standardization Factors

	Leading Index	Factor
1.	Industrial Production, Construction Component	.0262
2.	Stock Prices	.0168
3.	U.S. Refiners' Acquisition Cost of Domestic and Imported Crude Oil	.0272
4.	Net Insufficient Inventories	.1255
5.	Federal Funds Rate	.0289
6.	Real Exchange Rate	.7754
	Coincident Index
1.	Industrial Production	.1086
2.	Retail Sales	.0504
3.	Employment	.1663
4.	Unemployment Rate	.6747

Notes: The component factors are inversely related to the standard deviation of the month-to-month changes in each component. They are used to equalize the volatility of the contribution from each component and are "normalized" to sum to 1. (Under normal circumstances, updates to the leading and coincident indexes only incorporate revisions to data over the past six months.)

The factors above were calculated using 1985-1999 as the sample period for measuring volatility for the leading index, and 1986-1999 as the sample period for the coincident index. There are additional sample periods as the result of different starting dates for the component data. When one or more components is missing, the other factors are adjusted proportionately to ensure that the total continues to sum to 1. For additional information on the standardization factors and the index methodology visit our Web site: www.globalindicators.org.

To address the problem of lags in available data, those leading and coincident indicators that are not available at the time of publication are estimated using statistical imputation. An autoregressive model is used to estimate each component. The resulting indexes are constructed using real and estimated data, and will be revised as the data unavailable at the time of publication become available. Such revisions are part of the monthly data revisions, now a regular part of the U.S. Business Cycle Indicators program. The main advantage of this procedure is to utilize in the leading index the data, such as stock prices, that are available sooner than other data on "real" aspects of the economy, such as new orders and changes in inventory. Empirical research by The Conference Board suggests there are real gains in adopting this procedure to make all the indicator series as up-to-date as possible.

NOTICES

February 2004 Data ... Friday, April 16, 2004
March 2004 Data ... Friday, May 14, 2004
April 2004 Data ... Friday, June 18, 2004

All releases are at 11:00 AM (ET) and 10:00 AM (MEX).

ABOUT THE CONFERENCE BOARD. Founded in 1916, The Conference Board is the premier business membership and research network. The Conference Board has become a global leader in helping executives build strong professional relationships, expand their business knowledge and find solutions to a wide range of business challenges. The Board's Economics Program, under the direction of Chief Economist Gail Fosler, is a recognized source of forecasts, economic analysis and objective indicators such as the Leading Economic Indicators and the Consumer Confidence Index.

This role is part of a long tradition of research and education that stretches back to the compilation of the first continuous measure of the cost of living in the United States in 1919. In 1995, The Conference Board assumed responsibility for computing the composite indexes from the U.S. Department of Commerce. The Conference Board now produces business cycle indexes for the U.S., Australia, France, Germany, Korea, Japan, Spain Mexico and the U.K. To subscribe to any of these indexes, please visit www.globalindicators.org, contact the Global Indicators Research Institute at 212-339-0312, or email indicators@conference-board.org.

AVAILABLE FROM THE CONFERENCE BOARD

Mexico Business Cycle Indicators Internet Subscription $ 500 per year (1 user)
(Includes monthly release, data, charts and commentary)
Individual Data Series $ 15 per series downloaded
Monthly BCI Report $ 130 per year
(Sample available on request)
Monthly News Release (fax or email) $ 45 per year
BCI Handbook (published 2001) $ 20
Corporate Site License $2,600 per year

Business Cycle Indicators for Australia, France, Germany, Japan, Korea, Mexico, Spain and the U.K. are available at $500 per country per year (1 user). Discounts are available to Associates of The Conference Board and accredited academic institutions.