The latest fall followed a 0.4 per cent decline in April. Over the six-month period from November 2025 to May 2026, the LEI contracted by 1.1 per cent, slightly faster than the 1 per cent decline recorded during the preceding six months, TCB said in a press release.
The Conference Board’s Leading Economic Index (LEI) for the Euro area fell 0.3 per cent in May 2026, marking its third consecutive monthly decline and signalling continued pressure on economic activity.
Weak consumer, services and industrial-sector expectations weighed on the index.
However, financial indicators helped limit the decline.
It forecasts Euro area real GDP growth of 1 per cent in 2026.
Meanwhile, the Conference Board Coincident Economic Index (CEI), which measures current economic conditions, remained unchanged at 110.3 in May after also holding steady in April. Despite the flat monthly reading, the CEI increased by 0.2 per cent over the six months to May 2026, although this was slower than the 0.3 per cent growth recorded in the previous six-month period.
“The Euro area LEI declined again in May,” said Timothy Brennan, economic research associate at The Conference Board (TCB). “As in previous months, the consumer expectations component was the main drag on the Index. Lower expectations from businesses in the service sector and industrial producers also contributed to the monthly drop. However, positive contributions from financial components helped mitigate the decline.”
“The 6-month growth rate of the Euro area LEI remained negative, signalling pressure on economic activity ahead,” Brennan continued. “Consumer expectations improved only marginally in May and remains close to three-year lows, reflecting the ongoing strain on household purchasing power. Inflationary pressures tied to the conflict in the Middle East and its impact on energy markets constrained real incomes and weighed on consumer spending.”
He added that the European Central Bank’s 25-basis-point interest rate increase, combined with a US-Iran peace deal, could help ease inflationary pressures in the coming months.
“The Conference Board forecasts real GDP growth in the Euro area at 1.0 per cent for 2026,” Brennan said.
Despite the continued decline in the LEI, The Conference Board noted that the six-month growth rate remained above recession-signalling thresholds, indicating slowing economic momentum rather than an imminent downturn.
Fibre2Fashion News Desk (SG)
