The Conference Board announced today that the leading index for Australia increased 0.8 percent, and the coincident index increased 0.1 percent in December.

• The leading index increased sharply in December following a small decline in November. Although the leading index continues to be volatile from month to month, it has increased at a 3.8 percent annual rate since its most recent low in July 2003 (and at a 1.8 percent rate from the previous low in February 2003).
• December's moderate gain keeps the coincident index on an upward trend from its most recent low in March 2003. Correspondingly, real GDP grew at an average of 3.0 percent annual rate in the second and third quarters of 2003, up from 2.0 percent growth at the end of 2002 and beginning of 2003.
• The pick up in the leading index in recent months is suggesting a continuation of moderate economic growth, or even a slight improvement, through the first half of 2004.

LEADING INDICATORS. Six of the eight components in the leading index increased in December. The positive contributors to the index - in order from the largest positive contributor to the smallest - are money supply*, rural goods exports*, "medium-term" government bond yield, share prices, gross operating surplus*, and (inverted) sales to inventories ratio*. Building approvals* and yield spread declined in December.

With the 0.8 percent increase in December, the leading index now stands at 150.0 (1990=100). Based on revised data, this index decreased 0.1 percent in November and remained unchanged in October. During the six-month span through December, the leading index increased 1.1 percent, and six of the eight components increased (diffusion index, six-month span equals 75 percent).

COINCIDENT INDICATORS. Three of the five components in the coincident index increased in December. The increases - in order from the largest positive contributor to the smallest - occurred in employed persons, household gross disposable income*, and industrial production*. Retail trade* declined, while the (inverted) unemployment rate remained unchanged in December.

With the 0.1 percent increase in December, the coincident index now stands at 115.7 (1990=100). Based on revised data, this index increased 0.2 percent in November and increased 0.3 percent in October. During the six-month period through December, the coincident index increased 1.3 percent, with all five components in the series making positive contributions (diffusion index, six-month span equals 100.0 percent).

The next release is scheduled for March 24, 2004 at 6:00 P.M. (ET) In Australia - March 25, 2004 at 10:00 A.M. (AEDST)

DATA AVAILABILITY. The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available "as of" 5 P.M. ET on February 24, 2004. Some series are estimated as noted below.

NOTES: Series in the leading index that are based on The Conference Board estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals, and the CPI used to deflate money supply M3. Series in the coincident index that are based on The Conference Board estimates are industrial production and household disposable income. CPI was used to deflate retail trade.

Due to the Reserve Bank of Australia's discontinuation of the 3-month Treasury Bill (for details see "For the Record" in the June 2002 RBA bulletin), The Conference Board will use the Bank Accepted Bill 90 Days to calculate the yield spread from now on.

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

Email: indicators@conference-board.org
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 ten 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.

Australia Composite Indexes: Components and Standardization Factors

	Leading Index	Factor
1.	Medium Term Government Bond Yield	.0302
2.	Yield Spread, 10 year minus 90 day	.3507
3.	Share Prices, All Ordinaries	.0279
4.	Money Supply, M3	.2215
5.	Rural Goods Exports	.0176
6.	Sales to Inventory Ratio	.2229
7.	Gross Operating Surplus, Private Non-Financial Corporations	.0915
8.	Building Approvals	.0376
	Coincident Index
1.	Retail Trade	.0822
2.	Unemployment Rate	.4612
3.	Industrial Production	.0468
4.	Employed Persons	.2828
5.	Household Disposable Income	.1270

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. These factors were revised effective with June 19, 2001 release, and all historical values for the two composite indexes have been revised at the time to reflect the changes. (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 1977-1999 as the sample period for measuring volatility for the leading index, and 1959-1999 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

The schedule for 2003 for the "Leading Economic Indicators" news release is:

January 2004 data... Wednesday March 24, 2004

All releases are at 8:00 PM ET (10:00 A M AEDST the next day).

For detailed information on benchmark revisions, visit our website: www.globalindicators.org

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, Mexico, Spain 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:

Australia Business Cycle Indicators Internet Subscription $ 500 per year (1 user)
(Includes monthly release, data, charts and commentary)
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(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 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.