Westpac-Melbourne Institute Leading Index, barely changed
- prior revised to -0.15%
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, rose from -0.54% in June to -0.10% in July.
The indicator points to continued below trend growth (Westpac assess the trend at 2.75% and expects growth at 2.5% in 2018)
The Leading Index growth rate has slowed from 1.11% above trend in February to 0.10% below trend in July
- Two components account for almost all of the reversal: commodity prices and yield spread
- The contribution from other index components has been more mixed. On the positive side, the index growth rate has been boosted by: dwelling approvals; aggregate monthly hours worked; US industrial production; and Westpac-MI UE index. These improvements have been partially offset by bigger drags from the Westpac-MI CSI expectations index and the S&P/ASX 200
- The net impact of international components (commodity prices; yield spread; US industrial production) has swung from a peak of adding 1.5 percentage points (the peak) to the Index's growth in December 2016 rate to subtracting 0.5 percentage points in July 2017.
- On the other hand the domestic components (the remaining five components) have moved from flat in December 2016 to now adding 0.37 percentage points to the growth rate
