Australian Leading Index Rose 1.1% in July on Stocks, Housing
An Australian index of leading economic indicators rose in July as shares and dwelling approvals climbed.
The index, a gauge of future economic growth, gained 1.1 percent to 248.5 points from June, Westpac Banking Corp. and the Melbourne Institute said in Sydney today. The index shrank at an annualized rate of 1.8 percent in July after contracting 4.6 percent the previous month.
Central bank Governor Glenn Stevens, who left the benchmark interest rate at a half-century low of 3 percent on Sept. 1 for a fifth month, has signaled that his next move will be to raise the rate from its “emergency” level as the economy rebounds. Australia’s benchmark S&P/ASX 200 index of stocks has jumped 42 percent since the start of March.
“The pace of improvement in the growth rate of the leading index points to a significant improvement in growth prospects in 2010,” said Bill Evans, chief economist at Westpac in Sydney. Still, “we do not expect that future growth signals will be sufficiently robust for the central bank to see the need to move before next February.”
Westpac’s leading index tracks eight gauges of activity, such as company profits and productivity, to give an indication of how the economy will perform over the next three to nine months.
The coincident index, a measure of the current state of the economy, was little changed in July at 238.5 points.
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