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Benchmark Revisions - January 2008

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Released: Monday, April 21, 2003

The Conference Board announced today that the leading index for Australia was unchanged and the coincident index increased 0.1 percent in February.

  • The leading index was unchanged in February after declining in January for the first time since June 2002.
  • While there has been some moderate weakness in the leading index in recent months it is still too early to tell whether the upward trend in the leading index is moderating. In general, the leading index is signaling continued economic growth, but perhaps not significantly above the economy’s potential growth rate.
  • The coincident index, a measure of current economic activity, continued increasing in February. The strength in the coincident index continues to be widespread among its components with the six-month diffusion index remaining at 100 percent for the eleventh month in a row.

Leading Indicators. Five of the eight components in the leading index increased in February. The positive contributors to the index —in order from the largest positive contributor to the smallest— are the inverted “medium term” government bond yield, money supply*, sales to inventories ratio*, rural goods exports*, and gross operating surplus*. Three of the eight components of the leading index decreased in February. The negative contributors to the index —in order from the largest negative contributor to the smallest — are building approvals*, share prices, and yield spread.

With no change in February, the leading index now stands at 149.2 (1990=100). Based on revised data, this index decreased 0.2 percent in January and increased 0.5 percent in December. During the six-month span through February, the leading index increased 1.5 percent, and five of the eight components increased (diffusion index, six-month span equals 62.5 percent).

Coincident Indicators. Four of the five components in the coincident index increased in February. The increases - in order from the largest positive contributor to the smallest – occurred in the inverted unemployment rate, retail trade*, household gross disposable income*, and industrial production*. The negative contributor to the index was the number of employed persons.

With an increase of 0.1 percent in February, the coincident index now stands at 114.1 (1990=100). Based on revised data, this index increased 0.3 percent in January and increased 0.1 percent in December. During the six-month period through February, the coincident index increased 0.8 percent, with all five components in the series making positive contributions (diffusion index, six-month span equals 100.0 percent).

Data Availability. The data series used by The Conference Board to compute the two composite indexes reported in the tables in this release are those available “as of” 5 P.M. ET on April 19, 2003. Some series are estimated as noted below.

*Notes: Series in the leading index that are based on The Conference Board estimates are sales to inventory ratio and gross operating surplus for private non-financial corporations, the implicit price index used to deflate rural goods exports and building approvals. (Money Supply M3 levels from April 2002 are derived from growth rates reported by RBA). Series in the coincident index that are based on The Conference Board estimates are industrial production, household disposable income, and retail trade.

Due to the Reserve Bank of Australia’s discontinuation of the 3-month Treasury Bill (for details see ‘For the Record” in the June 2002 RBA bulletin). The Conference Board will use the Bank Accepted Bill 90 Days to calculate the yield spread from now on.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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