The Conference Board CEI for Australia, a measure of current economic activity, fell slightly in August - its first decline since May last year. With this month’s small decrease, the six-month growth rate of the coincident economic index has continued to slow, to 0.7 percent (about a 1.4 percent annual rate) during the period through August 2009, down from 1.4 percent (about a 2.9 percent annual rate) for the previous six months. However, the strengths among the coincident indicators have been more widespread than the weaknesses in recent months. At the same time, real GDP increased at a 2.0 percent annual rate in the first half of 2009 (including a 2.5 percent annual rate in the second quarter), an improvement from the decline of 0.8 percent annual rate in the second half of 2008.
After declining sharply in the second half of last year, The Conference Board LEI for Australia has been on a rising trend since the beginning of 2009 and its six-month growth rate has continued to accelerate. The leading index has exceeded its previous peak, and is now 2.2 percent above its most recent high reached a year ago. At the same time, The Conference Board CEI for Australia has continued to grow, but at a slower pace in recent months. Taken together, the current behavior of the composite indexes suggests that the economy will continue to expand, albeit slowly in the near term.
LEADING INDICATORS
Five of the seven components in The Conference Board LEI for Australia increased in August. The positive contributors to the index - in order from the largest positive contributor to the smallest - are building approvals, the sales to inventories ratio, yield spread, share prices, and money supply. Gross operating surplus and rural goods exports declined in August.
With the 1.8 percent increase in August, The Conference Board LEI for Australia now stands at 118.6 (2004=100). Based on revised data, this index increased 1.0 percent in July and increased 1.1 percent in June. During the six-month period through August, the leading economic index increased 5.7 percent, and five of the seven components increased (diffusion index, six-month span equals 71.4 percent).
COINCIDENT INDICATORS
Two of the four components in The Conference Board CEI for Australia increased in August. The increases - in order from the larger positive contributor to the smaller – occurred in household gross disposable income and industrial production. Retail trade and employed persons declined in August.
With the decrease of 0.2 percent in August, The Conference Board CEI for Australia now stands at 113.2 (2004=100). Based on revised data, this index remained unchanged in July and increased 0.1 percent in June. During the six-month period through August, the coincident economic index increased 0.7 percent, with three of the four components in the series making positive contributions (diffusion index, six-month span equals 75.0 percent).
