Leading Index continues to signal below-trend growth

  • Leading Index growth rate still negative at –0.5%.
  • Negative reads have now persisted since August 2022.
  • Indicator correctly predicted growth slowdown in 2023.
  • Growth outlook for next 3–9 months remains poor with per capita GDP declines likely to continue.

“The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose slightly to –0.50% in August from –0.56% in July.”

“The economy continues to move through an extended period of weakness. Despite another slight improvement this month, the Leading Index growth rate continues to track in negative territory, the measure having now been below zero for just over a year.”

“Negative prints for the Index indicate the economy is likely to grow at a below-trend pace.”

“This string of negative prints began in August last year accurately foreshadowed the sudden slowdown in the economy in 2023. Over the March and June quarters the economy has expanded at a 1.6% annualised pace – well below trend growth, which is closer to 3%.”

“Westpac expects this weak performance to continue over the next year or so with growth expected to come in at less than 1% for the year to June 2024. There may be some upside risks to that downbeat number now that population growth is likely to exceed 2% in 2023.”

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The Westpac-Melbourne Institute Leading Index of Economic Activity for July 2023 was released at 11am (AEST), Wednesday 20 September 2023. The next index will be released at 11am (AEST), Wednesday 18 October 2023.

The Westpac–Melbourne Institute Leading Index of Economic Activity report examines movements in the leading indicator of economic activity in Australia. It is designed to anticipate economic growth in the next 3 to 9 months. Further information can be found here.

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Dr Tim Robinson


03 8344 2325

  • Westpac-Melbourne Institute Leading Index