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Hotel Industry Leading Indicator weakens:
EDITOR'S NOTE
| September 27th, 2010 |
| e-forecasting.com eNews for the Hotel Industry |
DURHAM, New Hampshire —
The United States Hotel Industry Leading Indicator decreased 0.3%
during August, after an increase of 0.9% the previous month,
according to economic research firm e-forecasting.com in
conjunction with STR.
The Hotel Industry Leading Indicator,
or HIL, is a composite leading indicator that, on average, leads
the U.S. hotel industry’s business activity four to five months in
advance. The latest monthly change brought the index to a reading
of 114.6. The index was set to equal 100 in 2000.
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HIL’s six-month growth rate, a
signal of turning points, went up by an annual rate of 5.4%
during August after going up 7.4% in July. This compares to
a long-term annual growth rate of 3.5%, which is the same as
the annual growth rate of the country’s overall economic
activity.
“We continue to see a slowdown in growth
of the leading indicator, especially in the six-month growth
rate, which is one of the best ways to detect turning points
in business activity,” said Maria Simos, CEO of
e-forecasting.com. “Unless there are some positive
contributions to reverse this trend, we could see a slowdown
for the U.S. hotel industry during the next few months.”
Four of the nine components that make up HIL had a
positive contribution in August: Weekly Hours in Hotels;
Hotel Profitability; Interest Rate Spread and New Orders for
Manufactured Goods. Five of the nine components had a
negative or zero contribution to Hotel Industry's Leading
Indicator in August: Labor Market Tightness; International
Visitors Future Demand; Oil Prices; Housing Activity and
National Vacation Barometer.
The U.S. Hotel Industry
Leading Indicator, or HIL for short, is a monthly leading
indicator that provides useful information about the future
direction of the U.S. hotel industry. Building off the
tracking success of HIP, the real-time indicator for the
U.S. hotel industry, HIL was built as a composite indicator
that uses nine different components that, on average, when
put together have led the industry four to five months in
advance of a change in direction in the industry business
cycle.
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