Westpac and the Melbourne Institute describe their Leading Index as a composite measure which attempts to estimate the likely pace of economic activity relative to trend in Australia. The index combines certain economic variables which are thought to lead changes in economic growth into a single variable. This variable is claimed to be a reliable cyclical indicator for the Australian economy and an indicator of swings in Australia’s overall economic activity.
For the last four months, the Leading Index has returned values which implied below-trend growth in the near future. However, in what may turn out to be a boost for job-seekers and businesses, the indicator moved up into positive territory in October. The latest reading was at 0.44%, a level last seen in May.
September’s reading was revised up from -0.21% to -0.02%.
