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Benchmark Revisions - January 2008

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Released: Tuesday, September 26, 2006

The Conference Board announced today that both the leading and coincident indexes for Australia increased 0.3 percent in July.

  • The leading index increased again in July for the fifth consecutive month, and the small decline in May was revised up to a small gain. Real money supply, building approvals, and the sales to inventories ratio continued to be the largest positive contributors to the leading index in the last several months. With July's increase, the growth rate of the leading index continued to fluctuate in the range of 3.0 — 4.0 percent (annual rate) in recent months, only slightly below the most recent high of almost 5.0 percent reached in mid-2005. In addition, the strengths among the leading indicators have been somewhat more widespread.
  • The coincident index increased slightly again in July, and it has been on a slight upward trend since late 2005. At the same time, real GDP grew at a 2.0 percent annual rate in the first half of 2006 (including a 1.3 percent rate in the second quarter), only slightly up from a 1.9 percent average annual rate in the second half of 2005. The current behavior of the leading index suggests that moderate economic growth is likely to continue in the near term.

LEADING INDICATORS. Four of the eight components in the leading index increased in July. The positive contributors to the index — in order from the largest positive contributor to the smallest — are building approvals*, money supply*, the sales to inventories ratio*, and gross operating surplus*. The (inverted) "medium-term" government bond yield, share prices, yield spread, and rural goods exports* declined in July.

With the 0.3 percent increase in July, the leading index now stands at 163.3 (1990=100). Based on revised data, this index increased 0.5 percent in June and increased 0.1 percent in May. During the six-month period through July, the leading index increased 1.9 percent, and seven of the eight components increased (diffusion index, six-month span equals 87.5 percent).

COINCIDENT INDICATORS. Four of the five components in the coincident index increased in July. The increases — in order from the largest positive contributor to the smallest — occurred in employed persons, the (inverted) unemployment rate, retail trade, and household gross disposable income*. Industrial production* remained unchanged in July.

With the increase of 0.3 percent in July, the coincident index now stands at 119.7 (1990=100). Based on revised data, this index increased 0.2 percent in both June and May. During the six-month period through July, the coincident index increased 0.9 percent, with three of the five components in the series making positive contributions (diffusion index, six-month span equals 90.0 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" 10 A.M. ET on September 25, 2006. 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, and the CPI used to deflate money supply M3. Series in the coincident index that are based on The Conference Board estimates are industrial production and household disposable income. CPI was used to deflate retail trade.

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

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