By Rudi Filapek-Vandyck<\/p>\n
The annualised growth rate of the Westpac-Melbourne Institute Leading Index, designed to indicate the likely pace of economic activity in Australia three to nine months into the future, was a negative 1.2% in December. Westpac economists point out this is well below the index’s long term trend of a positive growth rate of 3.5%.<\/p>\n
The annualised growth rate of the Coincident Index was 3.3%, well up on its November read of 2.4% but the economists believe this was mainly due to the fiscal policy-induced jump in December retail sales with growth still below the Coincident Index’s long term trend of 3.7%.<\/p>\n
The growth rate in the Leading Index has now remained in negative territory for the second consecutive month. In the past this has been a useful indication of a likely recession in Australia, say the economists.<\/p>\n
Seven of the eight components of the Index contributed to the fall in December. Amongst the domestic components, the main contributions have come from: dwelling approvals (-0.9ppt); share price index (-0.7ppt); overtime worked (-0.3ppt); productivity (-0.7ppt); and corporate profits (-1ppt). Deteriorating conditions abroad have also been a major factor with the US industrial production component detracting an additional 2.3ppts.<\/p>\n
The Reserve Bank Board next meets on March 3. Westpac expect the board will further reduce official interest rates with the overnight cash rate eventually moving to 2% by mid-2009.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Westpac-Melbourne Institute Leading Index was negative for a second consecutive month in December.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6],"tags":[21],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/55170"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=55170"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/55170\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=55170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=55170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=55170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}