Australia Westpac Leading Index inches higher in July

Australia’s leading index, measuring the six-month annualized growth rate turned cautiously optimistic in July, according to survey results revealed by the Melbourne Institute on Wednesday.

Australia's Westpac Leading Index rose 0.05 percent m/m in July, from prior -0.22 percent in June, data released showed today. The six-month annualized growth rate in the Westpac-Melbourne Institute Leading Index rose from -0.15 percent in June to -0.12 percent in July.

The main contributors to growth were commodity prices, the market, United States’ industrial production and dwelling approvals. Partially offsetting those gains was a decline in aggregate monthly hours worked.

While the growth rate of the Index remains below zero, indicating a continuation of the below trend momentum seen over the last 15 months, it has improved significantly since the start of the year

Indeed, this latest reading suggests growth over the next three to nine months will be almost around trend, Westpac Institute reported.

Further, the Leading Index growth rate has lifted from being 0.92 percent below trend in February to 0.12 percent below trend in July. Meanwhile, the data point does not tend to move the FX market upon announcement. But it is a decent heads up to how the economy will develop in the next six to nine months, which is its intent.