The Westpac-Melbourne Institute Leading index of Economic Activity was developed as a tool to identify turning points in the Australian economy. It provides a measurement of Australia’s likely rate of economic growth for the next three to nine months, relative to trend, and it is one of several important private sector estimates which provide markets with clues as to short term economic conditions. Its latest December reading rose for the fifth month in a row, from a revised November figure of 0.00% to 1.28%.
Westpac’s chief economist Bill Evans said the run of above-trend readings signalled a robust outlook for 2017. However, while Westpac was “comfortable” with its 3% 2017 forecasts, 2018 was another matter.