Australia: Leading Index eases back a little – Westpac

Bill Evans, Chief Economist at Westpac, explains that the 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 1.11% in March to 0.92% in April.

Key Quotes

“This marks the ninth consecutive month where the growth rate in the Index is at or above trend. That followed a period of seventeen consecutive months where the growth rate had been below trend. That sustained period of below trend growth in the series had been pointing to the weakness we saw in the economy in the September quarter (although no lead indicator could have prepared us for a negative growth print).”

“The resumption of positive growth in the Index in August last year gave us some comfort that the bounce back in growth in the December quarter to 1.1% could have been anticipated.”

“While the strong bounce back in the December quarter was partly statistical in response to the negative quarter in September the ongoing positive signal from the Index is consistent with solid growth through most of 2017.”