Bill Evans, Research Analyst at Westpac, points out that the Australia’s six month annualised growth rate in the Westpac–Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from 0.41% in September to +0.08% in October.
Key Quotes
“With this latest slowdown, the Index growth rate continues to point to slowing momentum into the new year.”
“Over the seven months from October last year to April this year the growth rate averaged 0.89%. In the six months since April the growth rate has averaged only 0.19% – a clear step down.”
“Westpac expects momentum to slow to around 2.5% in the second half of 2018, which will be slightly below trend, with this slower pace to be sustained through 2019 at around trend of 2.7%.”
“Over the six months from May to October the growth rate in the Index held at 0.08%. There were few significant moves over that period with S&P/ASX 200 detracting 0.10 percentage points and dwelling approvals subtracting 0.14 percentage points. A number of small positives offset these effects.”
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