Australia Leading Economic IndexSeptember 2022 Data - 1960-2021 Historical

The Westpac-Melbourne Institute Leading Economic Index in Australia was down 0.1% mom in August 2022 after falling 0.2% in July, pointing to a fifth straight month of contraction. In the meantime, the six-month annualized growth rate in the index, which indicates the likely pace of economic activity relative to the trend three to nine months into the future, fell to -0.36% in August from 0.49% in July, marking the first negative print since the start of the year and the weakest since the delta lockdown hit in 2021. "The current loss of momentum reflects a combination of policy tightening, a less supportive global backdrop, and a cooling labor market," said Westpac chief economist Bill Evans. "Westpac expects growth in the Australian economy to slow from a robust 1.1% in the September quarter to 0.6% in the December quarter."

The Westpac-Melbourne Institute Leading Economic Index in Australia declined by 0.2% yoy in July 2022, the same as in the previous month and pointing to the fourth straight month of fall. Meantime, the six-month annualized growth rate in the index, which indicates the likely pace of economic activity relative to the trend three to nine months into the future, increased to 0.63% in July from 0.48% in June. "Latest reads are consistent with momentum continuing to track slightly above trend heading into year-end," said Bill Evans, Westpac chief economist. "While overall momentum in the economy remains above trend we expect that as we near the final quarter of the year growth in spending will slow under the weight of rising interest rates and high inflation which are already sapping confidence." However, these negative forces are, for now, being compensated by a very strong labour market and solid household balance sheets.

The Westpac-Melbourne Institute Leading Economic Index in Australia declined by 0.06% yoy in May 2022, the same pace as April's upwardly revised figure while representing the second consecutive month of fall. Meanwhile, the six-month annualized growth rate, which indicates the likely pace of economic activity relative to trend three to nine months into the future, slowed to 0.58% in May from 1.09% in April. Westpac chief economist Bill Evans said that here had been a significant shock to consumer confidence and a major contributor to the slowdown in May. “We expect this to see the growth rate in the economy fall below trend and should be foreshadowed by negative reads for the leading index growth rate later this year," he added. However, in the interim, like the leading index suggests, the economy’s positive momentum will carry through the June and September quarters as consumer spending continues to benefit from the post-COVID reopening and support from high household savings.