For what it’s worth, the troubled Westpac Leading Index, released today, once again signals strong growth ahead for the Australian economy:
The annualised growth rate of the Westpac Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future, was 4.1% in July, above its long term trend of 2.9%. The annualised growth rate of the Coincident Index, which gives a pulse of current activity, was 2.4%, below its long term trend of 2.9%.
However, I suggest that you don’t pay much attention to it. Even Westpac seems to have given up on it:
Growth through the year to the June quarter was 2.6% and we expect it to register an annualised pace of 2.2% in the second half of 2013 for full year growth in 2013 of 2.2%. That is well below the signals coming from the Leading Index which is pointing to above-trend momentum in the second half of 2013. Further out we expect growth to remain around a 2.5% (sub trend) growth pace throughout 2014…
