As a result, the LEI contracted by 3.7 per cent over the first half of this year, a less intense decline than the 5.1-per cent contraction over the second half of last year.

The US think tank’s coincident economic index (CEI) for the euro area remained unchanged in June this year at 108.7, after increasing by 0.1 per cent in May.

The CEI grew by 0.2 per cent over the six-month period from December 2023 to June 2024, slightly down from a 0.5-per cent increase over the previous six-month period.

The LEI provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, while the CEI offers an indication of the current state of the economy.

“All components, except for the systemic stress indicator, contributed negatively to the LEI in June. As in previous months the negative yield spread, weak orders indicators, and depressed consumer expectations weighed on the index," said Ian Hu, economic research associate at the think tank, in a release.

"As such, the six-month and annual changes to the index remain deeply negative and recession risks persist. However, further monetary easing by the European Central Bank is expected to alleviate growth headwinds in the second half of the year,” he added. 

Fibre2Fashion News Desk (DS)