23 October 2002, 08:49  Australia Aug. Leading Economic Index Rises 0.4%, Westpac Says

/www.bloomberg.com/ By Victoria Batchelor
Sydney, Oct. 23 (Bloomberg) -- A leading index of economic indicators for Australia, a gauge of growth over the next six to nine months, rose for the first time in six months in August as building approvals and stock prices gained, a survey showed.
Westpac Banking Corp./Melbourne Institute's monthly index of economic activity rose 0.4 percent in August. The leading indicator combines nine gauges of economic activity -- including overtime hours, building approvals, telephone installations, labor costs and share prices -- to give an indication of the likely pace of future economic growth.
Westpac said the index points to the economy slowing to an annual growth rate of about 3 percent as consumers spend less, a housing booms ends and a drought cuts exports and lowers farm incomes. The economy expanded 3.8 percent in the second quarter from a year earlier.
The first rise in the index in six months ``is not sufficient to materially change the general message from the index that economic growth is likely to slow,'' Bill Evans, general manager of economics at Westpac, said in a statement.
The Westpac leading index's annualized economic growth rate was minus 0.7 percent in August, below its long-term trend of 2.9 percent. That's the fourth straight month the annualized rate has been negative. It suggests economic growth will slow in coming months.
``The index is pointing to a slowdown in growth in the Australian economy from late this year and into 2003,'' Evans said. ``That will provide the central bank with ample justification for maintaining its current approach to steady monetary policy.''
The Reserve Bank of Australia has kept its benchmark overnight cash target rate unchanged the past four months at 4.75 percent because the global economic slowdown is damping confidence and crimping exports.

© 1999-2024 Forex EuroClub
All rights reserved