Australia: Leading Index still pointing to growth slowdown - Westpac

Bill Evans, Research Analyst at Westpac, points out 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, lifted from –0.02% in August to +0.21% in September.

Key Quotes

“Despite a lift back above trend this month, the Index growth rate continues to point to slowing momentum heading into year end.”

“Over the seven months from October last year to April this year the growth rate averaged 0.89%. In the five months since April the growth rate has averaged only 0.13% – 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 April to September the growth rate in the Index slowed from +0.82% to +0.21%.”