NSCB’s LEI data point

Growth is expected to slow down some more in the fourth quarter after a marked skid in the previous quarter that may have put the economy in a technical recession based on the composite leading economic indicator (LEI) for the fourth quarter released yesterday by the National Statistics Coordination Board (NSCB).

The economy in the third quarter, the first full quarter under the Aquino administration, contracted from the previous three months that showed a record 7.9 percent, attributed mostly to election spending.

The economy shrank a seasonally adjusted 0.5 percent in the third quarter from the second and compared with a year ago, growth slowed to 6.5 percent during the period.

An economy enters a technical recession if it shrinks two consecutive quarter-on-quarter.

The NSCB said the LEI rose for the fifth consecutive quarter but the upswing in the fourth quarter continued a slowdown that started in the third quarter.

The fourth quarter LEI increased to 0.026 percentage point from a revised 0.022 in the third quarter, which the NCSB said was the slimmest rise in the composite LEI since the fourth quarter of 2009 when the index started to shift direction after five quarters of a downturn.

According to NSCB, the number of positive contributors to the LEI totaled only six compared to 10in the third quarter, 11 in the second qarter, and nine in first quarter.

“The combined share of positive contributors for this quarter consequently dropped to only 51.5 percent from the 79.04 percent and 100 percent in the third and second quarters, respectively,” according to NSCB.

The positive contributors were tourist arrivals, number of new businesses, foreign exchange rate, stock price index, hotel occupancy rate, and electric energy consumption.

On the other hand, the negative contributors were wholesale price index, terms of trade index, consumer price index, money supply, and total merchandise imports. The negative contributors accounted for 48.5 percent of total contribution.

The wholesale price index (WPI) has been pulling the composite index down for two consecutive quarters as it decelerated further in the third quarter by 3.8 percent, the NSCB said. –Daily Tribune