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Westpac Leading Index Signals Below Trend Growth In 2023

AUSTRALIA DATA

The Westpac leading index for February fell 0.06% m/m after -0.12%. This brought the 6-month annualised rate to -0.9% up slightly from -1.0%, the seventh consecutive negative result. It leads economic activity compared to trend by 3 to 9 months, thus it is signalling below trend growth over 2023. It may have reached a tentative base though, which if the signal is correct could indicate a trough in growth in H2 2023.

  • Westpac expects the index to post more negative results, especially given recent overseas banking troubles.
  • The index was weighed down by hours worked, less confidence in the labour market, lower commodity prices and falling US IP.
  • See Westpac’s press release here.
Australia Westpac leading index vs real GDP %

Source: MNI - Market News/Refinitiv/Westpac

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