TCB's CEI for Australia rose sharply in December, due primarily to a large jump in retail sales spurred by the economic stimulus package. The six-month growth rate in the index has increased to 1.5 percent (a 3.1 percent annual rate) in the period through December, up from 0.4 percent (about a 0.7 percent annual rate) for the first half of 2008, with the strengths among its components remaining widespread. Meanwhile, real GDP growth slowed to a 0.3 percent annual rate in the third quarter of 2008, down from the 1.9 percent average annual rate growth for the first half of the year.
TCB's LEI for Australia began to decline in September 2008, and this decline has accelerated sharply in recent months. The fall in this index over the past six months is the largest since early 2001. Meanwhile, TCB's CEI for Australia, a measure of current economic conditions, has continued to increase during this period, but its growth has been well below the very rapid growth in the first half of 2007. The continued deterioration in TCB's LEI for Australia suggests that the economy will remain weak in the near term.
LEADING INDICATORS
Two of the seven components in The Conference Board Leading Economic Index™ (LEI) for Australia increased in December. The positive contributors to the index - from the larger positive contributor to the smaller - are gross operating surplus and the sales to inventories ratio. Building approvals, yield spread, money supply and share prices declined, while rural goods exports remained unchanged in December.
With the 0.9 percent decrease in December, TCB's LEI for Australia now stands at 112.8 (2004=100). Based on revised data, this index declined 1.1 percent in November and declined 0.3 percent in October. During the six-month period through December, the leading economic index decreased 2.3 percent, and four of the seven components increased (diffusion index, six-month span equals 57.1 percent).
COINCIDENT INDICATORS
Three of the four components in The Conference Board Coincident Economic Index™ (CEI) for Australia increased in December. The increases - in order from the largest positive contributor to the smallest - occurred in retail trade, household gross disposable income, and industrial production. Employed persons held steady in December.
With the increase of 0.7 percent in December, the TCB's CEI for Australia now stands at 112.0 (2004=100). Based on revised data, this index remained unchanged in November and increased 0.2 percent in October. During the six-month period through December, this index increased 1.5 percent, with all four components in the series making positive contributions (diffusion index, six-month span equals 100.0 percent).
